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September 2013 Performance Review

September’s portfolio performance was not expected - in what was a strong market for stocks our Aggressive portfolio beat the market, and Conservative portfolio came pretty close.

Too Much of a Good Thing

We run a huge mega-database each month to calculate things like our MAXratings and to identify the most attractive (generally less popular) investment areas. In addition to our regular calculations, we also look at composite performance data. Each time we  evaluate the thousands of open-end funds vs. hundreds of ETFs,  the average mutual fund beats the average ETF. The ETFs are cheaper, and most have less turnover. Why is this?

August 2013 Performance Review

Stocks and bonds sunk in August, which makes it difficult for a portfolio made up of both to perform well. Of all the things investors worry about, the high correlation of all asset classes is the most distressing, and most likely.

Trade Alert

We executed a trade in both the Conservative and Aggressive Powerfund Portfolios on August 15th, 2013. 

Trades in Both Portfolios

Stocks have been going great guns since we hit the bottom of the financial meltdown in March 2009. We generally try to increase our stock allocation on the way down and cut back on stocks as they climb and investors grow more optimistic.

July 2013 Performance Review

The June Swoon proved temporary as stocks rebounded to new highs in July. Even previously lackluster foreign stocks joined the party as both U.S. and foreign larger stocks rose just over 5%. Emerging market stocks weren’t in a festive mood though – they continued to underperform returning less than 1% in July. Bonds were mostly flat after sliding in recent months.

Second Quarter Review

Our own relatively small foreign stock and cash allocations kept our portfolios more or less in line with a blend of U.S. stock and bonds. Our sharp underperformers (longer-term bonds and foreign markets) were balanced by good gains in financials, Japanese stocks, and healthcare. Still, it was no quarter to brag about. 

June 2013 Performance Review

Almost all yield-oriented foreign investments were already sliding, and U.S. stocks finally got caught up in the downdraft. The S&P 500 fell 1.35%, although the drop in the index was better than the average returns in essentially all categories of funds except short term bonds and small cap growth, including many of our own holdings. It was a bad month to be diversified.

A Distinct Lack of Interest

Predictions about rates having nowhere to go but up might have looked equally correct half a dozen times in recent years – yet been wrong.

May 2013 Performance Review

Interest rates jumped, creating fears the end of falling rates is finally here. This took the entire bond market down almost 2% with a bit more damage to longer-term bonds (notably government bonds) which dropped almost 7%. High yield bonds, which are sensitive to interest rates but also to rising stocks and an improving economy, were down around a half percent.