Trends

Sector Stars
For the first quarter of 2010, the S&P 500 had a total return of 5.39%. The three sectors that outperformed the broad market were Industrials, Financials and Consumer Discretionary.

It’s All About Value
Large cap, mid cap and small cap mutual funds’ performance was stronger in value funds for the first quarter than growth funds. Over the last decade, value funds outperformed growth funds from 1000 – 2006, in 2008, and so far in 2010.

Yields & Rates
While the 10-year Treasury yield has remained virtually the same for Q1 of 2010 as Q4 of 2009, 6-month and 1-year CD rates have declined by about .30% each.

Housing – A Relative Improvement
Housing starts are up 17% from 2009, but 2009 represents the level of housing starts ever recorded.

Tips

Stock Values
Stocks look to be reasonably priced, so if you want to increase your presence in the market you may want to consider doing that now.

Give me land, lots of land …
If you’ve got a long horizon, residential real estate values continue to improve.

Three Reasons to Consider Index Funds
Even savvy, experienced investors know that managing a successful investment portfolio is challenging. Beyond selecting and allocating assets, you’re faced with the issues of expenses, management turnover and market uncertainty. Maybe.

Enter Index funds, an investment designed to replicate an index of stocks or bonds, and offer you three advantages:

Low cost. Because it’s an Index, management costs are minimal, so your expense ratio could be as low as .15%. Compare that to some large company stock funds which can average expense ratios of 1.0% or more.

Focus. An Index fund knows what it’s supposed to do. So fund manger decisions, exits, etc. aren’t part of the equation.

Reliability. Add the low-cost factor we just listed to the diversification inherent in an Index, and you’ve got a solid opportunity to earn at least average returns.

Let’s discuss this!

John Karas
President & CEO
johnkaras@riverviewbank.com
(360) 693-7442