Investing Newsletter April 2004

While the 12% return by Real Estate Funds made it the leading category at the start of the new year, our International Funds were even better. The Julius Baer International Equity (BJBIX) Mutual Fund topped our Favorite Mutual Fund list with a 14% return.

Back in the USA, Small Cap Mutual Funds were the best domestic stock category this quarter. While a 9% return for the RS Partners Fund (RSPFX) led these funds, our top US performer was ABN AMRO Mid Cap (CHTTX).

A list of our Favorite Mutual Funds for 2004 was updated in January with information through December 2003.

Asset Allocation for 2nd Quarter 2004

After a rather uneventful quarter we do not have any changes in our model porfolios. In fact, all of our portfolio choices are the same as they were at the beginning of the year.

While we have not changed our asset allocations for the new quarter, you still may want to consider some changes to your portfolio. You may recall that we added several funds to our model portfolios last quarter to provide additional diversification. Now may be a good time to rebalance your portfolio. If you have all of your small cap allocation in only one mutual fund, consider selling some of your position to open a new position in a second small cap mutual fund, or adding any new small cap money to a second small cap mutual fund.

Conservative Asset Allocation April 2004

Conservative Asset Allocation April 2004

Insightful Asset Allocation April 2004

Insightful Asset Allocation April 2004

Financial Markets Update April 2004

After a stellar performance in 2003, it was not surprising to see the stock market to take a breather. The S & P 500 managed a gain of less than 2%. Value stocks continued to outperform Growth stocks as they now have since the middle of last year.

The falling dollar continued to help International stocks outpace domestic stocks, as the EAFE Index performed twice as well as the S & P 500, returning just over 4% for the quarter.

The big winner in the 1st Quarter of 2004 is no stranger to the top of the investment leader board. A 12% return for Real Estate stocks helped them to dethrone Bonds as the best investment over the past 3 year and 5 year time horizons. Apparently, the threat of higher interest rates in the near future has inspired many people to buy a new house while they can still afford one. As long as interest rates continue to remain steady, these stocks and mutual funds should continue to do well.

Speaking of Bonds, the steady interest rates helped them slightly outperform the overall stock market for the quarter.

The change in leadership from Technology to Small Cap stocks that began last quarter continued into the new year. Technology stocks were relatively flat, while the Russell 2000 Small Cap Index was up over 6%. That helped the Small Cap Index achieve a 64% 1 year enough to push it ahead of the Technology stocks as the leading performers for the past year.


Investment Returns ending March 2004

Investment Returns March 2004