Nearly all asset classes appreciated in January. Correlations remain high between asset classes, as investors have either had a “risk on” or “risk off” approach to investing capital. January was a “risk on” month for the financial markets. Stocks, both domestic and foreign, enjoyed a positive month. Bonds across the entire spectrum of credit quality rallied, as well as commodities and REITs. The U.S. stock market had its best start to the year in 25 years. For the month, the S&P 500 was up 4.48%. Increasingly positive economic data were behind the rally in U.S. equities. Small and mid cap stocks rallied even more. The Russell 2000 Index witnessed a 7.07% gain for the month.
- February 14, 2012
Major U.S. stock market indexes started 2012 with gains as the Dow Jones Industrial Average (DIA) added 1.2%, the S&P 500 (SPY) gained 1.6% and the financial sector (IYF) added 2.4% to lead markets higher. The first five days of January are very important as in years since 1950 when the first five days have been winners, the rest of the year has logged gains 87% of the time.
- January 9, 2012
Even with record profits by U.S. corporations, most stock markets around the world succumbed to fears of sovereign debt default, a potential European recession, and slowing growth in emerging markets. With the exception of large cap U.S. stocks, more or less every other equity asset class finished 2011 in the red. International stocks, in particular, suffered large double digit losses. Surprising many people once again, bonds were among the best performing asset classes last year. Longer term Treasuries, in particular, delivered market leading returns.
- January 2, 2012