We have listed below the returns of five major indexes through the first quarter:
BarCap US Agg Bond +0.82%
S&P 500 +6.07%
Russell 2000 +2.47%
MSCI EAFE (Europe) +7.25%
MSCI EM (Emerging Markets) +11.45%
We are looking forward to another solid earnings season ahead, with even stronger support for the stock market coming from corporate guidance that will be full of optimism. Many investors are anxious because the markets are sitting at all time highs. But it is important to remember this old adage: the markets tend to disappoint the majority.
Sloy, Dahl & Holst, Inc. has stuck to a group of major themes over the past four years in regards to our allocations. These are to protect against a rising rate environment, the attractive upside potential of Energy and Financials, and the long term value for investors within international markets. Investors who have remained patient have begun to see these themes turn together.
The S&P 500 has been the best performing index consecutively over the last seven years. Don’t forget that this run comes on the heels of a decade of being negative year after year. Investment cycles can take a long time to play out and the reversion to the mean is real. While many investors will continue to chase the S&P and push the theme of Passive and Index investing, Sloy, Dahl & Holst, Inc. will act as we usually do: contrarian. Our calculated move into Passive investing will bode well for active management and the allocations of our portfolios.
We thank our clients for giving us their continued confidence and support. Don’t hesitate to contact us directly if you have any additional questions.