Portfolio , Stocks


Here is the updated income investor dashboard for September. Prices are as of the market close on Friday September 2nd. August overall had one general theme; stocks bad, bonds good. See the dashboard below.

August was one of the worst months on record for stocks. Markets are trading mainly on macro level news, European bank and sovereign concerns, US economic slowdown or recession concerns, etc. Stock indexes were down big for the month with international and emerging markets getting hit the hardest. I’ve heard it said that the US market is the winner in the ugly contest or something like that. Well, that was sure true this month. In a good sign of strength US dividend indexes held in particularly well for the month. Take a look at DVY, SDY, and VYM.

The high yield sectors also got hit with the exception of the defensive utilities. Real estate (IYR) got hit particularly hard. It had held up quite well in the sell off until August came around. MLPs also took it on the chin pretty well. See my recent post on MLP valuation here . mREITs (REM) did OK for the month but started to sell off at the end and have continued the sell off into Sept. I think there is good value in mREITs and the concerns over them losing their tax favored status are overblown but I have to honestly say I’ve never seen more political risk in investing as I see right now. These are not normal times. One thing new in the mREIT space is a new ETF, symbol MORT, that does a better job tracking the mREIT sector than REM.

Bonds had a very good month, in particular long bonds, with the TLT up over 9% for the month. High yield bonds did get cheaper as credit concerns come to the forefront once again. Munis and closed end muni funds did well and still represent good value in this environment.

That’s it for this month. September historically is not a kind month to equities and the macro concerns show no signs of abating so I’m not expecting much. I would not be surprised at all to see a retest of the August lows particularly if Europe continues to flare up.

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