Money and Investing - Performance Results NovemberSurprisingly, November was another good month for all the asset classes. The large-cap S&P 500 gained almost 2%, while smaller-cap stocks, as measured by the Russell 2000, gained 2.6%. Based on Russell indexes, value edged out growth in both the large- and small-cap areas. I was surprised by the strong performance this month of small caps. As I have explained in my previous newsletters (which can be found on my website http://www.altamontwealth.com the strong out performance of small cap stocks cannot be maintained indefinitely based on current valuation. Mid-caps were the anomaly this month: their 3.6% gain was significantly ahead of both large- and small-caps, and growth beat value by 70 basis points (that’s 0.7%). I frequently find that Mid Cap stocks don’t perform as expected because most of the investment world does not recognize them as a separate asset class.
The foreign stock Vanguard Total International benchmark was helped by a declining dollar, and posted a 3.7% gain in November. On the bond side, the Lehman Aggregate Bond Index was up 1.2%; high-yield corporates gained 1.6%, and developed markets foreign bonds climbed by 2.8%. Among our tactical asset class weightings, commodities gained 5.5% and emerging local markets bonds were up 2.2% (both positions are funded from an underweight to bonds). REITs gained another 4.7%, bringing their year-to-date tally to a dizzying 37.6%. I do not recommend owning REITs because they are over valued compared to the market value of the real estate they hold. They are still being valued primarily on the high current dividend rate.
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