Tag Archives: Russell indices rebalanced

POCKETBOOK: Week ending June 25, 2016

  • IMG_0204 •Feelings and the Brexit vote

    Burning down the neighborhood won’t bring prosperity or end the oppression, but it sure feels good for once to just do something, to hold up your middle finger to the rich man who shipped your last job to China and to strike back at the fresh-off-the-boat immigrant who will compete with your for your next job,” Rex Nutting wrote in an “Opinion: Brexits’ message: It feels good to tell them all to bugger off” at MarketWatch.com, June 24, 2016.

The tricky thing about  emotional and/or angry voting is the possible set of conseequences that  follow  no one ever seems to consider until afterward when  all is said and done.  There’s a lesson in that for all of us.

  • Market Quick Glance

Yikes! Jaws were  dropping when equity markets closed on Friday. Some of that fall, along with the high trading volume, was expected as  Russell  reconstituted  the portfolio holdings of their indices. That’s a once a year thing  that impacts trading volume and prices. This year, however, no one really noticed thanks to the Brexit vote.

That said, the bulk of the DJIA’s fall—and all the other equity 20 indices that Bloomberg follows—as you already know by now was thanks to how  UK voters surprised the world with their vote to leave the Economic Union.

If you’ve been rattled by it, chill. Market downturns can be expected going forward  but it’s unlikely  drops like that on the DJIA will become a  regular event even as the world warms to the UK’s new reality. Unless of course, the world goes mad. Or, we have problems here at home and our US economy fails to grow, inflation gets out of hand, or social, economic or political problems hit a high pitch. All of which could happen but hopefully not.

Back to market returns, talking heads are telling  investors to get used to accepting the idea that their  long-term average annual investment returns will be in the neighborhood of  4%. At that rate it will take 18 years for money to double. Or, $10,000 to grow to $20,000.

As for now, below are how the major indices closed the week. Please read through each as I have included how they have changed from last week’s close on June 18th to this week’s on June 25. Data is  according to Bloomberg.com.


-Dow Jones +1.22% YTD only lost about 1.4 % YTD even though it fell over 610 points on Friday.

  • 1yr Rtn -0.43% moved into minusland from last week’s up 0.75%

-S&P 500 +0.78% lost about 1.6 % from the previous week’s YTDclose of +2.42%

  • 1yr Rtn -0.92% and now in minus territory from last week’s close of +0.34%

NASDAQ -5.33% YTD lost about 2% from last week’s YTD close of -3.48%

  • 1yr Rtn -6.09 % down another 2%

Russell 2000 +0.03% YTD down over 1.4 % from last week’s +1.47% YTD return

1yr Rtn -10.61% and it lost about 1.1 percent more adding to  last week’s-9.56%

-Mutual funds

Note: Lipper reports its weekly Lipper Performance Report on mutual funds based upon Thursday’s closing prices. This week, the market’s swan dive happened on Friday. So expect the results below to be sunnier than they would be if Friday’s closing prices were included in the calculations.

So, through Thursday, June 23, 2016 the average U.S.Diversified Equity Fund was up 2.84 percent, according to Lipper.

Equity Leveraged Funds enjoyed the biggest gains during the week closing  up 12.53 percent on average. They were followed by the usual suspects—although their order has changed: Mid-Cap Value Funds were up on average 7.44 percent; Small-Cap Value Funds up 7.12 percent; and Equity Income Funds up on average 6.86 percent.

Precious Metals Equity Funds continue to score up on average 83.79 percent—a tad less than the previous week.

Worth noting is that the average y-t-d  return for the 2,304 funds included under the Sector Fund heading is up 9.36 percent as many fund types had y-t-d returns of between 11 and 17 percent.

Find out the all the particulars at www.allaboutfunds.com .

Visit www.allaboutfunds.com for weekly updates to see how equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

 •A word on gold

Lots of folks look to gold when markets are in turmoil. Decide that gold is something you’d like to have in your portfolio and deciding what to buy —individual gold stocks, or an ETF or a precious metals fund of one sort or another —-could be your biggest challenge. All have pluses and minuses.

I ran across this piece of advice last week a Luke Burgess’s Energy and Capital newsletter: “The #1 reason you should not own gold or gold stocks is if you believe in higher returns from another source.”

His  point is well taken. If you think gold is going to increase in value 10, 20, 30 or more percent that’s one thing.

But if you’re looking for around a 5 percent return, there are a number of high-quality dividend paying stocks that will fill that bill.