Market recap for July

Written by Marie DeCaprio MBA, CFA, CFP® | 05 August 2010

I realized I neglected to post June market results which is just as well since the market was down all of the second quarter then proceeded to have a good month of July.  So I spared you the bad news and can now talk about good news, which is just how I like it!  Just kidding.  But seriously, I have been watching markets for 22 years now and I don't ever recall the wild swings we have been seeing on a daily basis for the past few months.  If you are watching your portfolio frequently (something I do not condone) you know exactly what I am talking about.

Here's what is happening.  On a daily basis, there is some statistic published that is either favorable, mixed or negative to the economic forecast.  The picture is mixed for sure, especially given the backdrop of the drama in Europe.  No one is really committed to being an owner or a seller and so we have markets that move up and down, and down and up.  The bond market continues to rally ( lower rates) against the expectations of all the smartest strategists----the deflation word has reared its ugly head (which is good for bonds, bad for all you gold bugs).  The dollar was up then back down.  International markets are the laggards this year, though have rebounded recently given the relative stability in Europe.  Until the employment picture picks up, I'm not sure we are going to see any kind of real, sustainable growth in our economy or stability in the markets, if such a thing exists.

As of July 31, 2010 the index performance is as follows (based on Morningstar data):