Model Shadow Stock Portfolio: Up Modestly During an Atypical Year
After being in negative territory for a number of months, the Model Shadow Stock Portfolio showed a positive return year-to-date as of the end of November.
And after lagging for most of 2011, it finally passed the S&P 500 with a return of 1.5% compared to the S&P 500’s 0.9%, as measured by the Vanguard 500 Index fund (VFINX). Results for the past 19 years can be seen in Figure 1 and Table 2.
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It is hard to get excited about such a small return, particularly in a pre-election year, when the average return on the S&P 500 index since the Great Depression has been 21.7%. But it looks like we may avoid a pre-election year negative return, a scenario that has not occurred since 1931.
The economy seems to be gradually recovering, and if it were not for the problems in Europe, the stock market might have come closer to experiencing at least a normal year. As of early December, there are indications of a positive push that may bring us closer to an average year for the general market, which would be 12.6%.
It has been a year full of problems—political stalemate, unemployment, record bad weather and the euro crises. In addition, the usual government spending spree to win votes gave way to budget concerns. Many feel it is a miracle that the market has performed as well as it has.
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