Dec. 4, 2012
-- With only December remaining, a quick review of 2012 is in order. While the US markets will most likely finish up for full-year 2012, it is the ETF breakdown by major US markets, investment style, S&P sectors and international markets that reveals the full picture.
Interestingly, the U.S. stock market performance, as measured by the S&P 500 (13.3%), was eclipsed by a number of foreign country exchanges including Germany (22.3%), Hong Kong (23.5%) and India (26.8%) among others. The return by the investment-orientation shows almost equal performance of the S&P 500 Growth (13.2%) and the S&P 500 Value (13.1%). The major S&P sectors were lead by Consumer Discretionary (21.8%) as the American consumer returned to satisfy pent-up demand despite the still high level of unemployment. Technology, led by Apple, rose 14.5%, reflecting both corporate capital spending and individuals’
penchant for smart phones, tablets and internet related devices.
Europe, teetering on recession from sovereign debt issues, still managed a respectable equity performance and the euro rallied and by the end of November was marginally ahead of the dollar. Gold was up 9.3%, but was outdistanced by silver, which was ahead 20.1%. U.S. Treasuries, the investment of choice for conservative investors, rose 2.9%.
Based on our analysis of the investment environment, we maintain a cautious investment strategy. Despite some improvements in the direction of European sovereign debt policy initiatives, the mechanics have not been employed. Not until improvement in U.S. domestic economic growth and a viable resolution of the fiscal cliff will we become more aggressive. We maintain a balanced portfolio of domestic equities, fixed income, ETF’s, including housing (ITB), MLP’s, gold (GLD) and silver (SLV).