A long term investment is a short term investment that failed. Chevy Chase
Where are we, at the end of May?
May was a weird month, as they go. The NYSE Composite Index, which measures all the stocks on the exchange was breakeven (actually 0.09%, see below). The other indexes, as you will see were all nicely positive, other than the foreign indexes, which lost money. Generally, we just don’t see quite such a wide range of returns.
The measures of supply and demand that we follow continue to point to an eventual resumption of upward movement in the stock market. We are up for the year and the clients had a good, solid month. Technology was the leader, and we hold quite of bit of it, as you notice below (ONEQ, FTEC, FBIOX and even FSMEX). If we just didn’t hold foreign funds in May, life would have been that much more enjoyable.
I have replaced half of our emerging markets fund IEMG with a new commission free ETF, the iShares Core S&P Small Cap, IJR. I will begin reporting on that fund next month. I like to move in stages and the IJR is definitely the stronger sector and fund.
My final point is to note that when small company stocks begin to do well (even outperform), such as the IJR, it generally bodes well for the stock market. The converse is also true.
How Did the Markets and our Funds Do YTD and in May?
All index and fund returns are courtesy Morningstar.com. Here are the index returns and our fund returns:
| May | |||
| S&P 500 | 2.16% | ||
| Nasdaq (technology) | 5.32% | ||
| Dow | 1.05% | ||
| NYSE Composite | 0.09% | ||
| Morningstar Div Emerging Mkts | -3.19% | ||
| Russell 2000 (small co) | 5.95% | ||
| US Aggregate Bond Index | 0.66% | ||
| IEMG | -2.32% | iShares Emerging Markets | Fidelity commission free ETF |
| FQAL | 3.03% | Fidelity Quality Factor | Fidelity commission free ETF |
| ONEQ | 5.35% | Fidelity Nasdaq | Fidelity commission free ETF |
| FTEC | 7.05% | Fidelity Info Tech | Fidelity commission free ETF |
| FHLC | 1.49% | Fidelity MSCI Healthcare | Fidelity commission free ETF |
| IEV | -2.65% | iShares Europe | Fidelity commission free ETF |
| FBIOX | 7.57% | Fidelity Biotech | stock mutual fund |
| FSMEX | 4.79% | Fidelity Medical Equipment | stock mutual fund |
| FCNTX | 4.06% | Fidelity Contra Fund | stock mutual fund |
| FBGRX | 5.01% | Fidelity Blue Chip Growth | stock mutual fund |
| CFRAX | 0.18% | Catalyst floating rate | bond mutual fund |
| FFRAX | 0.13% | Fidelity floating rate | bond mutual fund |
| EIFAX | 0.14% | Eaton Vance floating rate | bond mutual fund |
| RNDLX | 0.18% | RiverNorth Strategic | bond mutual fund |
| FNMIX | -1.41% | Fidelity New Market | bond mutual fund |
| FAGIX | 1.41% | Fidelity Capital & Income | bond mutual fund |
| LENDX | 0.39% | Stone Ridge Alternative | peer to peer fixed return m.f. |
| Prime Meridian Small Bus LP | 0.53% | 1 month lag | private peer to peer fixed |
| Prime Meridian Real Estate LP | 0.63% | 1 month lag | private peer to peer fixed |
| KIP, Kay Income Partners LP | 0.56% | private mortgage fund |
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.
Best,