Archive for the ‘investor’ Category
Walmart Vs Gold – How Will Investors Be Rewarded?
Capital Market Recap
Investors experienced positive returns in virtually every asset class during the first quarter of 2011. Small U.S. stocks led the way with returns exceeding 8%. Emerging international markets were in negative territory for most of the quarter but ended in the black. Large company stocks around the world managed to shrug off the impact of natural disaster and nuclear crisis in Japan, political upheaval in the Middle East, and lots of other bad news, to provide returns in excess of long-term expectations.
Trailing period returns now incorporate two years of recovery since the market bottomed out in the spring of 2009. Major indices like the S&P 500 remain well below the peak values reached in the fall of 2007 (1320 now versus 1560 then) but well-diversified portfolios have recovered their value thanks to the strength of small company stocks and the receipt of dividends. The major indices now show positive returns when we look back three, five and ten years, with the exception of international stocks (EAFE) over the three-year period.
The bond market continues to labor under the burden of low current yields and the threat of higher inflation, which could push interest rates up and bond prices down. In the meantime, bond returns were slightly better than break-even for the quarter, as the asset class continues to perform its role of adding stability to a diversified portfolio.
