Fun Facts Newsletter | August 2016

There is an old stock market saying, “Sell in May and go away,” based on historical cycles that the stock market slumps during the summer (not to mention “going away” to the beach or vacation is more fun!). As with many stock market clichés, this adage is not always consistent given that the summer of 2016 has been strong in both June and July. I know summer isn’t over until after August, but with schools starting earlier every year, summer seems to keep getting shorter! Remember, “the stock market” is not the Standard & Poor’s 500 Index but rather the MSCI ACWI (All Country World Index). The MSCI ACWI rose 4.42% in July and is up 5.7% year-to-date. International stocks as measured by the MSCI World ex USA index were up 5.05% for July but a more modest 2.65% year-to-date.

Our broadly diversified strategy was supported in a recent Wall Street Journal article by personal finance columnist Jason Zweig. In his July 29 article “Your 401(k) Is Not Safe at Home,” he emphasized the risk of having too much of one’s 401(k) plan in employer stock. While the risk of loss is obvious, he pointed out (as we frequently do) that it is what you don’t own that may hold down your returns. He states: “In 2013, when the Wilshire 5000 stock index gained a spectacular 34%, one-fifth of all stocks lost money. … In 2014, although the total U.S. stock market gained 12%, more than four out of every 10 stocks went down anyway. In 2015, only five companies—Amazon, Alphabet (Google), Microsoft, Facebook and General Electric—accounted for well over 100% of the return of the U.S. stock market.” His advice: “Invest in all companies at once, through a total stock-market index fund, and you eliminate your risk of missing out on every other winner out there.”

Two nice personal notes from our office: Donna’s son, Cameron, just graduated from Army National Guard training with honors and will be enrolled at Wright State University this fall. Kathy’s son, Andrew, passed his state boards and is now a licensed physical therapist. Congratulations, Cameron and Andrew!

Enjoy these summer days! As always, please contact us with any questions, news or comments.

View/Print the Fun Facts Newsletter