Insightful Investing Update September 2009
Real Estate continued its march back from the dead in August with a 14% gain to lead all asset classes in a relatively quiet month in the financial markets. Thanks to that big bounce, all categories except Long Term Bonds are now showing positive returns in 2009. A little turmoil in China, caused Emerging Markets to catch their breath with a flat month, but they still lead all markets this year.
Stock market returns over the last 6 months are at levels that have not been seen since the 1975 recovery from the bear market of 1974. A move of this magnitude to the upside is even more rare than the move to the downside that preceded it beginning one year ago this month. One interesting observation about the current state of the market: while the pendulum for Real Estate, International Stocks, and Emerging Equities has now swung as much to the upside as it did to the down side, US Stocks still have a way to go to accomplish that.
While stocks are experiencing a slowdown in momentum in the short term, the market has not had a significant correction. That being said, cautious investors may want to consider rebalancing their portfolios now. It may be time to check your asset allocation in order to rebalance those investments that may have become too large a part of your portfolio. Take advantage of any pullback in the market to continue to move towards the target asset allocation that is appropriate for you and your financial situation.
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