Comparing the AA-Mosaic portfolio with either the VFINX or VTSMX results in a victory for the well diversified portfolio. The AA-Mosaic leads the VTSMX by 10.6% points and VFINX by 12.8% points. And this is without adding in the dividends that came in for the ETFs today. It will be several days before the broker statements are available, but there is not doubt about the strong relative (not absolute) performance of the AA-Mosaic portfolio.
Lowell Herr
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A few of you may remember Robert Stovall, a regular guest of Louis Rukeyser on the old Wall Street Week TV program. His son, Sam Stovall, is now the chief investment strategist at Standard & Poor’s Equity Research. The young Stovall reports that between 1945 and 2007 the S&P 500 rose 10.7 percent annually when the Democrats occupied the White House, compared to a 7.6 percent annual increase when the Republicans were in control. This decade is turning out to be a lost decade for stocks and it is winding down to be a particularly poor one for Republicans. The eight year increase under the Bush administration will do well to close at an annual gain of one percent per year.
It is a myth that the stock market does better when the Republicans are in control. The historical record speaks otherwise and this administrations record is just providing an exclamation point to this record.
This weekend the Oregonian reported on the deterioration of the infrastructure of the country. It is not only the bridges that are in disrepair, but we are also falling behind other countries in building out our Internet broadband lines. One can only hope a new administration will turn this country around, but then that is dependent on an informed electorate.
The general consensus I am picking up is that we should not expect much in the way of market gains over the next decade. It may be time to focus on investments that provide a respectable yield. That bodes well for value vs. growth investments.
Lowell Herr
Photograph: Katakolon, Greece
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