Insightful Investing Newsletter January 2010
4th Quarter 2009 Market Update
What started out looking like the world was comingto an end turned out to be a pretty good year for the stock market. In fact, by the numbers it was a fantastic year. The only sign of a negative number was last year’s shining star Managed Futures, which were down a couple of percent, and Long Term Bonds, which you should not have had in your portfolio anyway.
Where do we start? How about Emerging Markets Equities, up a whopping 79%. High Yield Bonds were not to shabby either, bringing home 58% for the year. Unfortunately, we are still somewhat behind over the last couple of years, unless of course you had an Insightful portfolio. In that case, you should at least be even.
Taking a look at US Equities, Mid Cap Growth was the leader of the pack this year, returning 46%. Bringing up the rear, if you want to call it that, were Value stocks in general, which were only up 20% for the year, not surprising since these are the stocks that were hammered the worst in the first quarter of 2009.
Real Estate bounced back strongly as well, gaining 39% for the year. That asset class is still down 15% for the last 3 years, so there is a long way to go before we can claim that we have had a full recovery. Even so, you cannot really complain too much, we are a lot higher than we were last year at this time.
With big bounce in the equity markets, it is somewhat surprising that bonds held up pretty well, picking up a respectable 6% this year. TIPS almost doubled that, most likely because the increased government spending on the economy has many expecting inflation to kick up soon.
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4th Quarter 2009 Mutual Fund and ETF Review
We could spend all day writing about this year’s winners, so we will keep it short. You can check out all the details in the fund tables. Our biggest winner was Lazard Emerging Markets (LZOEX) which gained 69% for the year. Royce Micro-Cap (RYOTX) was the leader of our domestic equity funds with a 56% return in 2009.
On the fixed income side of the house, Metropolitan West High Yield Bond (MWHYX) was the leader of the pack, returning 55% for investors. A couple of other strong performers were Fidelity High Income (SPHIX) which added 53% this year, and Fidelity New Markets Income (FNMIX) which tacked on 45% in 2009
Two more funds that deserve mention for 2009 results are Fidelity Real Estate Income (FRIFX) which brought home 47% for the year, and Scout International (UMBWX) which added 36%.
Portfolio Changes and Asset Allocation for 1st Quarter 2010
We have made several portfolio changes for 1st Quarter 2010. Some additions to our our list of 50 Best No Load Mutual Funds are PIMCO Foreign Bond (USD-Hedged) (PFODX), Yacktman (YACKX), Brown Capital Mgmt Small Co (BCSIX) and Intrepid Small Cap (ICMAX). We continue to update our List of Exchange Traded Funds with new products so that our 100 Best ETFs are really the only ones you need to look at to consider what to include in your investment portfolio.
The only change we are making for the start of the new decade is to take 2% out of cash and moving Real Estate up to our target allocation of 6%.
Mutual Fund Portfolios January 2010
ETF Investment Portfolios January 2010
