Front Page|Our Services|Our Team|Client Center|Financial News|Events|Contact Us

Financial News

More Articles  Printer Friendly Version

 

How Strategic Asset Allocation And Rebalancing Worked In The 12 Months Ended June 30

A year ago, U.S. stocks were the top performers among major global stock markets. Over the past 12 months, a total turnabout occurred.

In the 12 months ended on June 30, 2016, China's stock market had sustained a loss of 21.2% and U.S. stocks were big winners among major global stock markets.

In the 12 months ended June 30, 2017, the turnaround occurred and U.S. stocks were the laggards while China roared ahead.

The turnabout offers important insight into why rebalancing and strategic asset allocation are so crucial to investment success.

In the 12 months ended June 30, 2017, China's stock market delivered a 29.6% return, compared to a 21.2% loss in the 12 months ended June 30, 2016.

The U.S. went from being the leader among major global stock markets a year ago, to being the laggard in the more recent 12-month period.

The pattern of today's losers becoming tomorrow's winners is not uncommon in investing. For example, in the 12 months ended June 30, 2016, the biggest loser among different styles of U.S. stocks was small-cap growth, which suffered a loss of six-tenths of 1%. In the more recent 12 months ended June 30, 2017, small-cap growth stocks were the biggest winners, with a 22.9% total return.

The same pattern also was seen among U.S. industry sectors. Financial stocks were the dogs of the 12-month period that ended June 30, 2016, when they lost 4.2%. But they were the darlings in the 12 months ended June 30, 2017, with a 35.4% total return.

Strategic asset allocation and rebalancing help ensure you buy lagging assets when they decline in value. So, you are prepared in case they snap back, as happened in the instances highlighted here. It's a secret of investment success because it prepares you for surprises.

With that in mind, we want to remind you that the Standard & Poor's 500 index closed on Friday at 2472.10, just a fraction off Wednesday's closing price of 2477.83, which set a new all-time high.

A change sentiment or an unexpected bad surprise could trigger a 10% or 15% plunge at any time. But last week's economic data indicated that the outlook for the economy remains positive, and the fundamentals that drive stock prices remains strong. While no one can reliably predict the stock market's next move up or down, adhering to a discipline of broad diversification, strategic asset allocation and rebalancing remains the best course for long-term investors.

We are independent financial professionals communicating at a frequency attuned to you, and you can get financial wisdom here anytime from your smartphone. Tune in to our YouTube channel for breaking news coverage and subscribe to our email newsletter.


This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation.

Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.


Email this article to a friend


Index
Why Does The S&P 500 Keep Breaking Records?
U.S. Stocks Nearly Doubled In The Last Five Years
The Big Economic News The Media Keeps Missing
Trump Tax Plan Upends Year-End Tax Planning
Key Senators Agree On A Road To Cutting Taxes This Year
Countdown To Retirement: Seven Steps To Get Ready
5 Estate Planning Steps To Benefit Your Elders
Year-End Tax Planning Could End With A Thrill This Year
This Week's News About Wealth Management
The Good News The Financial Press Keeps Missing
Despite A Chorus Of Bears, The Bulls Played On
Stocks Dropped For Second Straight Week Amid Strengthening Economic Reports
17 Year-End Moves That Can Preserve Your Tax Benefits
Finding The Balance For Retirement Draw-Downs
Key Components Of A Post-Divorce Estate Plan
Despite Wall Street Guru's Terrible Advice A Year Ago, He's Back

This article was written by a professional financial journalist for Vantage Point Financial Services, LLC and is not intended as legal or investment advice.

©2017 Advisor Products Inc. All Rights Reserved.
© 2017 Vantage Point Financial Services, LLC | 329 Regency Ridge Drive, , Centerville, OH 45459 | All rights reserved
P: 937-432-1111 | F: 937-432-1110 markblack@vantagepointadvisor.com |
Contact Us

Privacy Policy

Securities offered through First Allied Securities, Inc., A Registered Broker/Dealer, Member: FINRA/SIPC.  Advisory services are offered through First Allied Advisory Services, Inc., A Registered Investment Adviser.

This site is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security which may be referenced herein.  We suggest that you consult with your financial or tax advisor with regard to your individual situation.  This site has been published in the United States for resident of the United States.  Persons mentioned in this site may only transact business in states in which they have been properly registered or are exempt from registration.