The Margin

Artesys News & Insights

Weekly Commentary 7/31/15

The MSCI ACWI IMI global investable equity index finished the week up 0.92%. The S&P 500 finished up 1.19%. MSCI EAFE finished up 1.02%. The Barclays US Agg Bond Index finished up 0.32% as 10-year Treasury yields fell from 2.27% to 2.20%. For the week, Large Value, Mid Caps and Small Growth finished ahead of the S&P 500.

 

The S&P 500 added its fourth positive month for the year, finishing July up 2.10%.  If we look at monthly returns over a longer time period, say the last 20 years, the S&P 500 has recorded 154 (64%) positive months and 86 (36%) negative months.  This seems about right, being that most investors accept that the market goes up about 2/3 of the time and down 1/3 of the time. On average, when the S&P 500 has a negative monthly return, it loses 3.75% and when the S&P has a positive monthly return, it gains 3.35%.  Now on the fixed income side, the Barclays US Agg Bond Index added its third positive month for the year, moving up 0.70% for July.  Using the same time frame as above, we see that the Barclays has had 165 (69%) positive months and 75 (31%) negative months.  Again, we’re not too far off of the 2/3 up 1/3 down theory, but it is a little better than the S&P 500.  The average up month for the Barclays is 0.99% and the average down month is -0.68%.  The annualized standard deviation for the 20 year time period is 15.17% for the S&P 500 and about 3.5% for the Barclays.