There was an interesting observation in the S&P Outlook recently. Since 1945, in the period from November-April, the S&P 500 returned 7.19%; in the May-October period, just 1.6%. What do do? Sell in May, and Buy back in November!
I think this is true this year. I feel like we’re due for a correction. It might be a good time now, especially after the recent records.
They recommend doing the following.
For May-October overweigh- consumer staples- health care
For November – April overweigh- financials- industrials- materials- consumer discretionary- information technology
Now that’s an interesting observation…
Here’s a chart that breaks the returns by month, averaged since 1950.
I like Vanguard as a company. I have been with them for a couple of years now. I like what they offer: both, in terms of fund selection, and in terms of the services they offer.
Why would I want to invest in Vanguard funds? First, they give you a good selection. And second, you can put your investments on auto pilot: you can actually do dollar-cost averaging at no cost!
So far, I have invested in 2 funds at Vanguard (NJ Tax-Free Fund; and S&P Index Fund). Every month, $50 gets automatically invested into each of them from my bank account. I really like that.
The downside? There is usually a $3K minimum investment for each of the funds. (It would be great if it was $1K.)
I am planning to shift some of my money from my brokerage account into Vanguard. Like I said, having an auto pilot is a very good benefit for me.
Here are some of the funds at Vanguard that I find interesting (besides the 2 I own). You can take a look at all of them at https://flagship.vanguard.com/VGApp/hnw/FundsByTypeSec
Taxable Short-Term BondVanguard Short-Term Investment-Grade Fund Investor Shares (VFSTX)Average annual return: 4.96% (1 year) 3.68% (5 year) 5.13% (10 year)
BalancedVanguard STAR Fund (VGSTX)Average annual return: 9.79% (1 year) 8.63% (5 year) 8.94% (10 year)
Vanguard Wellesley Income Fund Investor Shares (VWINX)60% bonds; 40% stocksAverage annual return: 10.69% (1 year) 7.26% (5 year) 8.51% (10 year)
Vanguard Wellington Fund Investor Shares (VWELX)32% bonds; 65% stocksAverage annual return: 12.85% (1 year) 9.04% (5 year) 9.52% (10 year)Negative: 10K initial investment required
Domestic Stock – GeneralVanguard Dividend Growth Fund (VDIGX)Average annual return: 17.84% (1 year) 7.56% (5 year) 6.84% (10 year)
Vanguard Windsor II Fund Investor Shares (VWNFX)Average annual return: 17.19% (1 year) 10.90% (5 year) 9.89% (10 year)
International/Global StockVanguard International Value Fund (VTRIX)Average annual return: 18.94% (1 year) 18.05% (5 year) 9.67% (10 year)
Vanguard Total International Stock Index Fund (VGTSX)Average annual return: 19.64% (1 year) 17.41% (5 year) 8.15% (10 year)
Vanguard Global Equity Fund (VHGEX)Average annual return: 19.12% (1 year) 17.94% (5 year) 12.50% (10 year)
I am just looking over the 2006 Semi-Annual iShares MSCI Series report I received today. I’m thinking, US economy will slow in the next year or two. Looking at the markets outside of US, I might want to invest in other assets.
For instance, iShares Australia Index (EWA). 1 year return: 15.83%; 5 year return: 148%.
Brazil Index (EWZ): 1 year: 70%; 5 years: 187%
Canada Index (EWC): 1 year: 33%; 5 years: 103%
Mexico Index (EWW): 1 year: 45%; 5 years: 194%
Those are some impressive returns. I like Canada and Australia indexes: stable countries with very good results. I should have invested in Brazil when it went down a year or two ago; same with Mexico.
Sorry. No data so far.