27 May Market Update—05/25/2021
Since our last update Feb. 9th 2021, stocks have steadily moved higher tacking on another +7.50%. That brings the total performance year-to-date of the S&P 500 to 12.50%. The majority of you are up slightly more than that as last years losers are this year’s biggest winners. The average stock both in the portfolio and the overall market continues to be slightly overvalued – as you can see from the Morningstar fair value chart below – thus bargains are more difficult to find.
With the S&P 500 outperforming the rest of the world by nearly 10% annually over the past 10-years, it’s hard to imagine international stocks not playing catchup. As a result, global funds and stocks will be our primary emphasis going forward.
As for bonds, interest rates are still rock bottom with the 10-year US Treasury paying 1.60%. Record amounts of debt and an accelerating economy make these an unattractive choice.
So the plan is – add to global stocks and funds on market declines, trim overpriced stocks, stay the course with gold and keep some cash handy for uncertainty.
Thank you again for your confidence and trust. I appreciate you all very much and look forward to being of benefit and service to you. If you have any questions or concerns, please call me or my assistant Mary at 817-334-0706.