Investors fared well in June. The S&P gained 3.6% for the month while the tech-heavy Nasdaq surged 6.0% and the more equal-weighted Dow Jones Industrial Index gained 1.2%. Both the passive Index 100 and the active Radius 100 strategies performed in line with the stock benchmark, returning 3.5% and 3.1% respectively. Despite the broad index gains, only five of the eleven sectors contributed to the positive month for stocks. The gains were largely led by Technology’s 7.8% increase.
The latest inflation release showed another modest decline in core inflation (currently 3.3%), and bond investors continue to see a decline in yields (recall the inverse relationship between bond prices and yields). The Vanguard Total Bond Index returned 0.9% during the month. Given the uncertainty that remains going forward as to the timing of any interest rate cuts, we currently prefer lower-risk short- and intermediate-term bonds. The Balanced Risk Portfolio returned 1.5% in June due to weakness in commodities and gold.
We remain generally cautious in our approach to investing and favor solid fundamentals and quality assets when looking at investment opportunities for our clients. We advise investors to remain prudent and maintain their targeted investment allocations.
