In the latest issue of The Lange Report, we finally had a chance to share some positive market news. In fact, the second quarter of the year turned out to be the first positive quarter in a year.
Continuing the upturn, the market also had a great July. The S&P 500 reached its low on March 9, 2009 closing at 676.53. On August 3, 2009, it closed at 1002.63. This is a return of 48.2% off the March 9th bottom. The second quarter performance of the S&P 500 – an increase of 15.9% for the quarter – was its best quarterly performance in over 10 years.
Even though the market is still well off the highs that we experienced in 2008, the latest market news is certainly promising. Many of our clients continue to ask what’s going to happen to the market in the next 3 to 6 months or even in the next year. The truth is – we don’t know. Nobody knows.
However, it is interesting to take a look at historical trends. From 1926 (before the depression) to the second quarter of 2009, the S&P 500 Index has generated an average annual return of 9.6% (compared to government bonds which have averaged 5.5%). Let’s say that you invested $1 in 1926. If you had invested in government bonds, you would have roughly $100 today. If you had invested in the S&P 500 Index, you would have roughly $2,000 today.
Of course, individual circumstances play a critical role in determining what asset allocation is appropriate for you. At Lange Financial Group we continue to be believers in well diversified portfolios with some representation in most asset categories.
If you’d like to take a look at a more detailed analysis of the latest market figures as well as other economic indicators including international markets, emerging markets, interest rate changes and unemployment figures – it’s all available in the latest edition of The Lange Report. For a copy, please contact the office at 1-800-387-1129 or sign up for our e-mails on the home page of this website.