In a Nutshell
The second quarter was a yawner overall for the U.S. stock market. With all the concerns about rising interest rates, Greece, and more recently China, this year has been one of the least volatile on record. Through the end of June, the S&P 500 has not closed more than 3.5% above or below where it started in January. This is a first for the history of this index, which spans more than 50 years (Source: Bespoke Investment Group).
Bonds had a more difficult time of it this past quarter with all the major indexes posting a loss. Expectations of a rate hike by the Federal Reserve later this year pushed bond yields up and when yields go up, prices usually go down.
Because bonds lost ground, the classic balanced portfolio of 60% large company stocks and 40% high quality bonds was down this quarter. If rates continue to rise, the bond portion of the portfolio, which has acted as a mainsail in a steady breeze and provided positive performance, may turn into an anchor.
More excitement was found in commodities and real estate. Although with real estate, down almost 11% this quarter, it wasn’t the kind of ride most investors want. Oil and agricultural products were the big positive drivers of commodities. [Read more…] about Q2 2015 Market Update