It is often hard to know what the market returns when all we see on TV or the internet is the minute to minute ticker. As investors we need a broader view of how the market has done so we can know if we are getting market returns with our investments. Matson Money does a great job of informing our clients on how the market has done as a whole, so that they can compare their returns to the worldwide market.
Here is an excerpt from the Matson Money quarter one statement.
“Stock Market’s across the globe cooled off in the first quarter after some big gains in 2013. The S&P 500 Index was able to hold earlier gains and ended the quarter up 1.8%, its fifth consecutive quarterly gain. In addition, the Dow Jones Stoxx Index of 600 European companies also rose 1.8%, while the MSCI Emerging Markets Index surrendered earlier gains to end slightly down 0.37%. Overall, the Dow Jones World Stock Index, excluding the U.S., inched up 0.2%. Meanwhile, bonds started the year off on a positive note; the Barclays U.S. Aggregate Bond Index increased 1.84% in the first quarter.
As a result of last year’s stellar returns, investors and advisers will be flocking to invest in the top funds and latest market fads. In addition, the financial industry will undoubtedly be host to hundreds of new funds/strategies. However, all of these actions are not always a good road map for main street investors. Between 1945 and 1965, annual portfolio turnover averaged a steady 17%, suggesting a fund held a stock for 6 years. Fund managers now turn their portfolios over at an average rate of close to 90% annually; an average holding period of about one year. If a six year holding period can be characterized as long-term investing, and if a one year period can be characterized as short-term speculation, the majority of mutual fund managers today are probably not investors – they are speculators and gamblers. ”
Summary
So there you have it. Quarter 1 may not have been amazing, but long term investing is the way to avoid speculating and losing big by getting in or out at the wrong time. Stay diversified and you will see much growth in the long term.
Reference
Matson Money. “Account Statement.” Letter to James Hancock. 1 Apr. 2014. MS. N.p.