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WHAT'S NEW? Our Latest Updates!

June 2003 performance review

Our Conservative portfolio was essentially flat, up just .36% in June. The weak link was international bonds, which have been among the strongest asset classes over the last year or so.

How We Manage

All of our model portfolios are up since we launched them at the beginning of April 2002 save one, the Daredevil portfolio (our most risky) which is down 1.2%. We’re satisfied with this performance as the Dow, S&P 500, and NASDAQ are still down 12.42%, 13.4%, and 12.47% respectively in the same period. 

July 2003 Trade Alert!

We are lightening up a bit on stocks and increasing our bond positions with shorter maturities and higher credit profiles in each of our model portfolios. These changes lower overall risk and lock in gains made from above-target stock allocations and bond durations over the last year.

May 2003 performance review

The Conservative portfolio was up 5% in May, beating April’s return of 3.31%, which had been the largest return in a month since we started the portfolio. The Portfolio is now up 9% since its April ’01 inception. We’re pleased with this return considering the fact that the stock market as a whole is down 20% for the same period.

C.O.S.T.S.

We’ve had a remarkable streak of choosing funds for our model portfolios that, soon after our allocating them, were either closed to new investors or were purchased by other fund families and converted to load funds.

April 2003 performance review

The Conservative portfolio made its biggest one month move to date, up 3.3%. Bonds and stocks were both strong this month and didn’t cancel each other out like they have in other months. Every fund in the portfolio was up this month. As we mentioned in this months newsletter, this type of convergence can raise risk.

Diworsification

Since the market peak of March 2000 stocks have lost money with some brief run-ups, while bonds have largely made money with some brief pullbacks. In statistical terms, the behavior of stocks and bonds over recent years is called low correlation

March 2003 performance review

The Conservative portfolio was up .68% in March. Stocks were up in March, with the S&P 500 and Dow up about 1% and 1.5% respectively. Long-term US government bonds were down about 1.2% in March, but all our bond fund choices were up in this portfolio. We don’t feel longer term US government bonds are the place to be right now. If rates climb fast, our bond fund choices will likely lose money also, just not as badly as we think government bonds will fall. We’re considering investing in a variable rate fund here shortly.

Performance Review

Let’s look back over the last 12 months since we launched the Powerfund Portfolios at what has been going on in the markets and with the 7 model portfolios we follow, and how we have done compared to the market and other benchmarks.

February 2003 performance review

The Conservative portfolio was almost completely flat in February. The positive action was again from bond funds. Bonds were strong on investor's fear of war and stocks across the board, with the portfolio's high yield, foreign, and investment grade U.S. bond funds all up over 1%.