Returns for week ending 1/30/09

Model portfolio, hypothetical returns for past…
1 week: -0.3%
26 weeks: +8.8%
52 weeks: +33.8%

Value of $10,000 invested at inception: $53,221

Worst January Ever

Stocks wrapped up their worst January on record with a final plunge on Friday.

The Dow Jones Industrial Average finished January down 8.84% on the month. Previously, the worst January for the Dow had been that of 1916, when it fell 8.64%. Friday, the Dow dropped 148.15 points to 8000.86 after briefly dipping below the 8000 mark. The Dow has fallen five straight months and in 12 of the last 15.

The S&P 500-stock index lost 2.28% Friday to end at 825.88, for cumulative losses in January of 8.57%. Until Friday, its worst January from 1929 onward occurred in 1970, when it lost 7.65%.

Both stock-market indexes are off by more than 40% from their 2007 highs.

Historically, stocks' January performance has been thought of as an informal indicator for the market's direction the rest of the year. When the S&P declines in January, the index loses an average of 2.4% in the next 11 months, according to data going back to 1950 from Ned Davis Research. When the S&P climbs in January, the index posts an average gain of 12.3% in the next period.

Returns for week ending 1/23/09

Model portfolio, hypothetical returns for past…
1 week: 1.8%
26 weeks: +8.6%
52 weeks: +30.3%

Value of $10,000 invested at inception: $53,354

Returns for week ending 1/16/09

Strategic Growth model portfolio, returns for past…

1 week: -0.2%

26 weeks: +5.3%

52 weeks: +26.6%

Value of $10,000 invested at inception: $52,411

Returns for week ending 1/9/09

Strategic Growth model portfolio, returns for past…

1 week: -2.2%
26 weeks: +4.0%
52 weeks: +29.5%

Value of $10,000 invested at inception: $52,502

Absolute and Relative Returns by Holding Period

click to enlarge

Now 12 months into the live test, the Strategic Growth Model (SGM) portfolio continues to generate positive returns in spite of the adverse market conditions. Compared to the market, the SGM portfolio has generated 71% in excess returns over the past 52 weeks. And it continues to exhibit no correlation to the market trend.

This is a place holder, will update later. Please check the blog for NEXT week's holdings and updated performance measures.

Returns for week ending 1/2/09

Strategic Growth Model (SGM) portfolio, returns for past…
1 week: +1.3%
26 weeks: +5.5%
52 weeks: +34.4%

Value of $10,000 invested at inception: $53,684

The footprints of a Secular Bear

In a Secular Bear Market (US), US Treasuries perform better than US equities over a 10 year span. Here we see that the S&P 500 is down over 26% over the past 10 years. Note that several international indices have done much better.

Dow performance 2008

To put this year's performance in perspective, this chart illustrates the 15 worst calendar year performances of the Dow since its inception in 1896. As today's chart illustrates, the Dow's performance in 2008 ranks as the third worst on record. Only 1931 and 1907 endured greater declines. It is of interest that major banking crises occurred in 1931, 1907, 2008, and 1930 – the four worst calendar years on record in terms of stock market performance.

The Nasdaq Composite had its worst year ever in 2008, while the S&P 500 Index had its third worst year ever.

Here is the yearly performance for 2008.

Dow Jones industrials -33.84
S&P 500 -38.49
Nasdaq Composite -40.54
Russell 2000 small cap -34.80