A Quick 2Q Wrap-Up

Just like that it is July 2021! That means both the 2nd Quarter and 1st Half of the year have come to a close. Here are a couple of quick notes about the quarter including a few things that changed and did not change on the year.

Stock and bond markets along with portfolio performance continued to be strong. It seems there is less caution in the air with an economy continuing to come out of the pandemic. Although the expression “the most unloved bull market” is still on peoples’ minds. Reason being that worries abound as the US Fed and Treasury continue to pump record amounts of money into the US economy. And there are plans for the stimulus to continue. This state of affairs risks inflation among other economic maladies.

Stock and bond markets along with portfolio performance continued to be strong in 2Q.

Bond prices fared very well as the 10-year US Treasury yield reversed its 1Q climb and fell to 1.46% to close out the quarter… and to 1.30% this week. Bond PRICES rise when interest rates fall. Savers miss out when interest rates fall, however.

On balance there are more good things to say than bad… although it depends with whom who you speak!  

As stated at the end of 1Q 2021, rising stock prices are a good thing! In the spirit of “buy straw hats in winter” (read: pay attention in order to be prepared for the future) rebalancing portfolios can again be a prudent action.

Below are back-of-the-envelope returns* for 2nd Quarter of 2021 for the major US stock averages. Note that technology and high-growth stocks picked up steam in the Quarter while small-company stocks (as measured by the Russell 2000) still are the winners on the year.

On the YEAR*:

  • Dow Jones: UP 12.75%
  • Nasdaq: UP 12.5%
  • S&P 500: UP 14.4%
  • Russell 2000: UP 17.0%

On the QUARTER*: (note the catch up by technology in the Nasdaq

  • Dow Jones: UP 4.6%
  • Nasdaq: UP 9.5%
  • S&P 500: UP 8.1%
  • Russell 2000: UP 4.1%

The 10-year US Treasury began 2021 yielding 0.91%, went up to 1.74% and higher earlier in the year and now stands at 1.30% – a VOLATILE but so far decent year for bonds. Smart eyes will continue to watch the bond market.

As always, please reach out with any questions about particular situations and the “art” of goal setting amidst market records. Also, remember to ask me the difference between market and investor returns!

*WSJ. Market Data. 6/30/2021.

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