Foreign Stocks Take the Lead

After the last several years of trailing performance we have heard from many investors questioning the continued efficacy of investing in international equity. We specifically tackled the topic in our early January Blog post Does Diversification Still Work?  We stated that while it certainly had not worked out recently, over time diversification still makes sense and we still believe in it.

With the completion of the first quarter you can see why. The US stock market had a fantastic quarter, rising 5.74%, however international stocks performed even better.  The total international market gained 7.92%.  While it certainly is too early to declare victory for foreign stocks over US stocks for 2017, it has clearly been beneficial to have an allocation to international stocks for the year to date.

We fully expect there will be times when foreign stocks outpace and when US stocks outpace. However, it is impossible to know beforehand which will be in favor and for how long.  By maintaining exposures to both asset classes, and avoiding the temptation to time the markets, it provides a smoother ride for your investment portfolio.

 

Index Performance    March1QTrl 1 Yr
US Stock (Russell 3000)0.07%5.74%18.07%
Foreign Stock (FTSE AW ex US)2.56%7.92%13.85%
Total US Bond Mkt. (BarCap Aggregate)-0.05%0.82%0.44%
Short US Gov. Bonds (BarCap Gov 1-5 Yr)0.05%0.39%-0.13%
Municipal Bonds (BarCap 1-10yr Muni)0.12%1.55%0.21%
Cash (ML 3Month T-Bill) 0.02%0.10%0.36%

 

About

Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

 

There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC. This information was gathered from reliable sources but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated.
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