What a great month for markets! Every single stock category that we track was down in June! Wait...what? You are happy stocks are down? That's right, stocks just got a little cheaper in June. Whether you want to thank Greece or the Federal Reserve for the declines this month we are now in a position to purchase stocks a little cheaper than last month. Think of it like a coupon that expires this month. If we get another month of declining markets you get an even bigger coupon. The one thing NOT to do is try to time the market. Predicting these ups and downs is a fool's game (because it's impossible). If you don't believe me just look at the academic research.
Let's take a look at the numbers. US large cap was one of the hardest hit in June with US large cap core stocks down just over 2% and US large cap value stocks down just under 3%. US small cap stocks did a little better but were still down 0.64% and US small value down 1.56%.
International was slightly worse than their US counterparts. Both International large cap core and Intl. large value stocks were down over 3%. Intl. small cap core and value stocks were also down albeit slightly less at approximately 1.5%. Emerging markets got the title of worst performer of the month being down 3.18%. Even short term bonds were down but only slightly at 0.06%.
Now, let's check in with Jim to see what the he thinks of this temporary pullback in the markets (is it redundant to say "temporary" when we know all pullbacks in the market are temporary?).
"I've been watching the Greece Debt Crisis very closely. Not because it has any impact on a long-term disciplined investment strategy but purely as an intellectual exercise in international politics, because that is really all it's good for. If anything use the drama provided by the media as a good opportunity to buy stocks at a discount."
Wow. I will never watch the news the same way again. Thank you Jim, thank you.
Here's the monthly return numbers with stock charts:
May Returns By Asset Class
US Large Cap Core: (2.05%)
US Large Cap Value: (2.72%)
US Small Cap Core: (0.64%)
US Small Cap Value: (1.56%)
International Large Core: (3.06%)
International Large Value: (3.30%)
International Small Core: (1.44%)
International Small Value: (1.71%)
Emerging Markets: (3.18%)
Short Term Bonds: (0.06%)