“The trick is to stop thinking of it as ‘your’ money.” – IRS auditor.
Where are we, at the end of August?
It seems that every month there is something interesting to say about the crazy variation in stock market performance. Here is the most surprising fact: the New York Stock Exchange Composite index (average stock) rose only 0.41% in August; the S&P 500 rose 2.16% and the various technology and small company indexes rose over 4%. So, we could say that it paid off to be in the sectors that were working. Generally, KII clients have enjoyed out-performance all year, as you will see from your monthly and YTD summaries. At the end of September, I will calculate your YTD returns again. Remember, if your account is heavily skewed toward fixed interest, that lowers returns in a good month. But in summary, KII clients had an OUTSTANDING month.
A couple of investing articles I read in August presented interesting perspectives on the markets. Ken Fisher believes that the markets will remain strong after the November elections, for the simple fact that the result should be gridlock in government. Regarding the fact that the bull market is “old” by historical standards (already 9 ½ years), Michael Gayed points out that we have had only nine bull markets since 1926. Statistically, you just cannot draw a conclusion about what is normal or what is too long – you only have nine data points!
For now, the bull market remains “on” and so we remain invested. We will have ups and downs, better months and worse months, but there is no evidence that a bear market is imminent.
How Did the Markets and our Funds Do in August?
All index and fund returns are courtesy Morningstar.com. Here are the index returns and our fund returns:
|Russell 2000 (small co)||4.19%|
|US Aggregate Bond Index||0.64%|
|ONEQ||5.74%||Fidelity Nasdaq||Fidelity commission free ETF|
|IJR||4.82%||iShares Small-Cap||Fidelity commission free ETF|
|FENY||-2.93%||Fidelity Energy||Fidelity commission free ETF|
|FTEC||7.43%||Fidelity Info Tech||Fidelity commission free ETF|
|FDIS||4.85%||Fidelity Discretionary||Fidelity commission free ETF|
|FHLC||5.01%||Fidelity MSCI Healthcare||Fidelity commission free ETF|
|FBIOX||5.72%||Fidelity Biotech||stock mutual fund|
|FSMEX||7.45%||Fidelity Medical Equipment||stock mutual fund|
|FCNTX||4.51%||Fidelity Contra Fund||stock mutual fund|
|FBGRX||5.84%||Fidelity Blue Chip Growth||stock mutual fund|
|PSGAX||5.67%||Virtus KAR Small-Cap Gr||stock mutual fund|
|FKDNX||6.94%||Franklin Dynatech||stock mutual fund|
|CFRAX||0.21%||Catalyst floating rate||fixed income mutual fund|
|EIFAX||0.50%||Eaton Vance floating rate||fixed income mutual fund|
|FFRAX||0.25%||Fidelity floating rate||fixed income mutual fund|
|GIREX||0.89%||Griffin real estate int rate||fixed income mutual fund|
|RNDLX||0.90%||RiverNorth Strategic||fixed income mutual fund|
|FAGIX||0.93%||Fidelity Capital & Income||fixed income mutual fund|
|LENDX||0.49%||Stone Ridge Alternative||peer to peer fixed return m.f.|
|Prime Meridian Small Bus LP||0.57%||1 month lag||private peer to peer fixed return|
|Prime Meridian Real Estate LP||0.67%||1 month lag||private peer to peer fixed return|
|KIP, Kay Income Partners LP||0.56%||private mortgage fund|
Your investment return(s) for the month of August was/were as follows:
We should talk if you would like to review exactly where you stand or if we should consider a change. I am available at your convenience. I have Skype video in case you would like to do a video conference.