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An Exhausted Bull Reaches New Highs

On June 24, the S&P 500 index touched a new high of 1968.17. While many bears have been patiently waiting for what they feel is a long-overdue correction, the market pushed into record territory during a bumpy June. Fuel for the upward move was provided by the Federal Reserve, which recently reaffirmed its focus on jobs over financial stability, as well as by improving jobs and consumer confidence data. This move higher lifted all boats, but the Model Shadow Stock Portfolio especially benefited as it invests in more volatile micro- and small-cap stocks. The Model Fund Portfolio trailed the Model Shadow Stock Portfolio as it holds less risky assets, but it still performed well for the month.

The Model Shadow Stock Portfolio gained 7.4% in June, outperforming the Vanguard Small Cap Index fund (NAESX), which gained 5.0%, and the DFA US Micro Cap Index fund (DFSCX), which gained 4.3%. For the year, the Model Shadow Stock Portfolio is now down 0.7%, trailing NAESX, which is up 6.4%, and DFSCX, which is up 1.5%. The Model Shadow Stock Portfolio has a compound annual return of 17.8% from its inception in 1993, while the Vanguard Total Stock Market Index fund (VTSMX) has gained 9.4% annually over the same period.

The Model Fund Portfolio gained 2.2% in June. In comparison, the Vanguard Total Stock Market Index fund (VTSMX) gained 2.5%. For the year, the Model Fund Portfolio is now up 7.5%, ahead of VTSMX, which has gained 6.9%. The Model Fund Portfolio has a compound annual return of 9.8% from its inception in June of 2003, while the Vanguard Total Stock Market Index fund has gained 9.4% annually over the same time period.

NEW THIS MONTH

There were no transactions in the Model Shadow Stock Portfolio or the Model Fund Portfolio during the month of June.