CLARITY. INSIGHT. PARTNERSHIP.

Thursday, July 30, 2009

Asset Class Update

Below is an update of a table we published in April and May. The data is from the Russell Investments index returns calculator found at www.russell.com:



The first column shows returns of the major domestic equity asset classes since the market bottom of March 9, 2009. They are pretty remarkable -- up an average of 55% over 4 1/2 months! We also see that Small and Microcap stocks have outperformed Large Cap stocks, which is what we would expect for this type of market recovery.

The second column shows returns over the past year. These returns are pretty sobering, as we see that the average is still down 20% over 12 months, despite the dramatic upturn over the past few months. This demonstrates just how bad things were, and that we still have a way to go before we recover everything that was lost in the financial meltdown of last fall. That said, a 20% decline over 12 months is not that unusual, and it does not look to me like we are in the midst of the Great Depression II.

This will be our last blog post for a few weeks. We are headed back to Cape Cod with our kids for one last hurrah of summer vacation. As usual we will be accessible by voice mail and e-mail. Hopefully, the world will remain relatively calm while we are away.