Fun Facts Newsletter | December 2015

Flat. That’s probably the best way to describe the investment markets in 2015. -0.33%            MSCI ACWI IMI, a benchmark of the global stock market

+3.01%           Standard & Poor’s 500 Index, a benchmark of US large companies

-0.41%            MSCI USA IMI Value, a benchmark of US value style stocks

-3.85%            MSCI ACWI Ex USA, a benchmark of international stocks

-4.02%            MSCI World Ex USA IMI Value, international value style stocks

-13.23%         FTSE Emerging Markets All Cap, international emerging markets stocks

+0.97%           Barclays U.S. Aggregate Bond Index, benchmark of US taxable bonds

Putting this in perspective, flat is not a bad thing given we have had nearly 7 years without a major annual stock market decline of 10% or more, which is a long stretch. We are not forecasting a major stock market decline, but stocks can drop 10% to 20% at any time without advance notice. Like gravity, this principle has not been repealed.

There has been a huge performance differential between international and U.S. stocks, with international returns much lower. The pendulum of US and international stocks was in favor of international stocks from 2002 to 2009 (7 of 8 years).

The pendulum has been in favor of US stocks from 2010 to 2015 (5 of 6 years).

Over the past 15 years, US stocks have been superior in 7 years and international stocks have been better in 8 of the 15 years. While we can’t predict the exact timing, the pendulum will swing back in favor of international stocks in the future.

Turning to news from our firm, we are pleased to introduce Kim Masco to you as our new Client Service Assistant, replacing Tricia Smith. Kim joins us from Macy’s where she was an Executive Assistant in HR Finance, Benefits Administration and Health Plans. Prior to that she was Administrative Manager for a real estate development company. Kim’s email address is kim@bernofinmgt.com and her telephone extension is #3. We look forward to introducing you to Kim!

Best wishes for a joyous and healthy holiday season! As always, please contact us with any questions or news or comments.

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