US Equities ignore World Tension -- Go Marching On
03/04/2011 0 comments
Conventional wisdom would holdthat US Equities would have dropped over the last week based on the continuing tension in Libya. However, that has not proven to be the case. There trend of increasing risk appetite continues as the MidCap stocks are replaced with SmallCap stocks.
Over the past few weeks we have seen Growth leading Blend leading Value. We also see SmallCap leading MidCap leading LargeCap.There was no move out of these top ETFs and continuing moves towards the SmallCap as the SmallCap blend closes in on MidCap Growth.
Assets Class | Symbols | 03/02 Trend Score | 02/23 Trend Score | Direction |
---|---|---|---|---|
Russell Smallcap Growth | IWO | 14.83% | 14.5% | ^ |
Russell Midcap Growth | IWP | 13.33% | 13.19% | ^ |
Russell Smallcap Index | IWM | 13.29% | 12.9% | ^ |
Russell Smallcap Value | IWN | 12.43% | 12.08% | ^ |
Russell Midcap Index | IWR | 11.98% | 12.37% | v |
Russell Midcap Value | IWS | 11.56% | 12.32% | v |
Russell Largecap Growth | IWF | 10.61% | 10.96% | v |
Russell Largecap Index | IWB | 9.94% | 10.46% | v |
Russell Largecap Value | IWD | 9.94% | 10.77% | v |
The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).
With the Shiller, Buffet and Hussman all pointing to equities being overvalued, there is need for caution. There is a belief that the government will continue to support the recovery but we have not yet seen the measures needed to manage the debt really bite.While there is continued appetite for risk, and there clearly is, and with continued government backing, US Equties are likely to favor the smaller growth stocks. If you are just in Large Cap stocks, you are missing out on some of the growth and moving into the MidCap or SmallCap equities makes sense. Symbols:Normal,0,false,false,false,EN-US,X-NONE,X-NONE,MicrosoftInternetExplorer4,IWO,IWP,IWM,IWN,IWR,IWS,IWF,IWB,IWD,
Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
For those who are heavily invested in US Equities, it is important to have other asset classes such as real estate and commodities as a hedge against likely corrections.
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