The Nvest Wealth Strategies Analysis and Commentary
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Analysis for November 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Commentary for November 2008 :: Horrific Trick
Despite two large one-day rallies during the month (advances of over 10% on October 13 and October 28) and a strongly positive final week, October was difficult for investors. It was somewhat encouraging that the market was able to shoot higher following the lows of the previous days, which may signal that a bottom for equities is slowly being put in place. As we discussed at our town hall meeting for clients earlier last month at Wedgewood Golf & Country Club, we do not believe that a stock market recovery will be immediate like a V or W. More than likely, we believe it will take the shape of an elongated U, wherein we bounce around a bit around the lows (the bottom of the U), and then recover strongly.
We have been working in client portfolios over the last week in transition for when markets rebound higher. We do know that recent events have created major uncertainty, and major uncertainty usually brings major opportunity. In the words of Warren Buffett, be greedy when others are fearful, and be fearful when others are greedy.
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Analysis for October 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Analysis for September 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Analysis for August 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Analysis for July 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Analysis for June 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Analysis for May 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Analysis for April 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Analysis for March 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Analysis for February 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Analysis for January 2008 :: Fund Performance
Stock and Bond Fund Performance by style
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Analysis for December 2007 :: Fund Performance - 2007 Archive
Stock and Bond Fund Performance by style
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Analysis for December 2006 :: Fund Performance - 2006 Archive
Archive of Equity and Fixed Income mutual fund performance by month.
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Commentary for September 2008 :: Playing Hurt
The month of August provided some relief from two consecutive months of decline in June and July. Thus far in 2008, 3 months have been positive (April, May and August) while 5 have been negative. The average domestic stock fund edged up 1.2% in August but remains off 10.1% for the year-to-date. The US economy has slowed dramatically in the recent year, and the US government and Federal Reserve have responded with massive fiscal and monetary stimulus - a pain-killer of sorts. It appears the US economy is continuing to play hurt in a sense.
What should investors expect going forward? What do we expect? There are many worries unwinding in, what appears to be, slow motion. Banks and financial institutions are mending their fences, trying to rebuild the financial balance sheets (still writing off bad loans and trying to attract new investment capital). Individuals are losing jobs, seeing income evaporate as high fuel and food costs rise; and they worry about declining home and investment values. Now foreign economies are slipping. And, in a couple of months a new President will be elected. The markets can, and often do, climb a wall of worry. But can it climb this many large worries?
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Commentary for August 2008 :: Bubble, Bubble! Is Oil In Trouble?
July was another month of stock value declines. However, the Federal Reserve has aggressively addressed two issues: a frozen credit market (difficult for businesses and individuals to borrow), and a slowing economy. The Fed has lowered interest rates from 5.25% to 2% in six months. Despite these actions, a growth risk still remains. At the same time, inflation poses a significant concern and its outlook remains highly uncertain. The Fed expects inflation to lessen, but thus far it has been stubborn. Stock vigilantes have been battling oil (and commodity) speculators. Since July 14, oil has declined over 20% from $147/barrel to $115/barrel. Oils price bubble is in trouble because US and worldwide demand is sliding due to too high prices. The transition will not be quick; Rome was not built in a day; and, battleships do not turn on a dime.
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Commentary for June 2008 :: Muddling Along
The U.S. economy appears to be muddling along; potentially stuck in the mud that will not produce a recession or a recovery. The economy does not appear very vibrant. Forecasts call for slow, slow growth. Worries abound for investors: bank and real estate loan problems, declining real estate values, rising inflation (particularly in oil/gas, food and commodities), and a low dollar trade value. House prices are down and stock prices are still below where they ended 2007. The prospects appear to suggest a slow growth economic environment with worrisome inflation for the next couple of years. And, if the U.S. economic outlook looks soft and inflationary, the world economic outlook seems to be muddling down as well. After all, anytime the financial structure is de-leveraging, it takes a while to complete the process.
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Commentary for May 2008 :: Best House in a Tough Neighborhood
This is not a monthly commentary on the state of real estate or housing which continues to capture news headlines. Rather, in the current economic environment, stocks offer the best investment choice for long term investors. Even with the economic neighborhood looking bad (soft), suggesting that company earnings are also uncertain (earnings largely influence the movement of stock prices), stock values are still more attractive than owning expensive (low yielding) Treasuries. Stocks are cheap even when one considers the worst case earnings scenarios.
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Commentary for March 2008 :: Plumbing Still Clogged
Two fears currently overhang the US economy: recession and inflation. The troubling prospects for a long-running recession and spiraling inflation suggest no quick solution to our financial woes. It started months ago, even years ago, when interest rates encouraged “lenders” to provide money to anyone who could fog a mirror. Irrational exuberance has unraveled into irrational exasperation wherein the financial markets are frozen; finding money is very difficult. The backdrop of frozen credit, akin to clogged plumbing, holds a key to future market recovery. At the moment, it appears this crisis is in slow motion; the credit pipeline is stubbornly plugged and flow is not easily restored. As the clog begins to move, so too will be better days for the stock market.
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Commentary for February 2008 :: Weak Link in the Chain
January 2008 will go down in history as one of the worst starts for the financial markets ever. Large write-downs by some of the most prominent banks have led those on Wall Street to grow very pessimistic about the prospects of all companies (not just the banks or those with exposure to mortgages), painting all with the same brush.
It is likely that October ushered in the start of a bear market. If that is the case, we are four months into it; the average bear market lasts just eight. That could mean that a new market advance is not far off (April or May perhaps).
In the meantime, we are looking for opportunities to invest client cash in stock funds, which are great values today relative to just a few months back. Continue to keep a long-term investment discipline and emerge successful.
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Commentary for December 2007 :: Long Term is a Green Banana - Part II
On November 27th, we wrote Part I, of Long Term is a Green Banana to discuss how violent market sell-offs shorten investor time horizons. To be sure, the economic forecasts and recent financial news is not good (but what do you expect from the news?). As such, client portfolios show November’s negative effects, but the year is still a positive experience. Additionally, in the past week we have seen large investors swoop in to take advantage of some good values (Abu Dhabi and Citigroup); they are investing for the long-term.
What do long term investors do? They stay invested and view corrections as prime buying opportunities for the long-term!
Happy Holidays!!!
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Commentary for November 2007 :: The Good War
A war has been taking place in the markets recently - one in which bulls continue to battle bears. One day the bull maintains the upper horn, only to be knocked backward the next by the claw of the bear. Is the current bull market over?
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Commentary for September 2007 :: Where is Waldo?
The credit crisis, which has been provoked by defaulting subprime and Alt-A home loans, can be likened to a futile exercise of Where’s Waldo?
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Commentary for August 2007 :: After Christmas Sale In July!
The recent market correction has created a buying point that can be likened to an After-Christmas sale... In July!
Also, a repost of Thinking About Tomorrow - Our ccurent view of the market moving forward.
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Commentary for July 2007 :: Stressful Days Ahead
As a supplement to our quarterly newsletter, we discuss why we beleive that volatility will likely stick around through the remainder of the summer, providing a source of much stress for investors.
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Commentary for June 2007 :: Are Stocks Overvalued
This monthly commentary discusses our response to a common question after almost five years of price appreciation.
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Commentary for May 2007 :: A Spring to Remember
It certainly has been an eventful spring. While the recent market volatility has caught many by surprise, looking at history shows us that the events are not reason to worry for those invested in the long-term.
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Commentary for March 2007 :: Market Commentary
Discussion of the Market’s one-day decline of 3 percent.
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Commentary for December 2006 :: Golly!!!
The markets finished the year on a tear, giving investors reason to cheer.
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Commentary for November 2006 :: Turning Point - Indeed!
A look at 2006 as a turning point year. The Fed on Pause