Sep. 5, 2006 - Market Update 8/31/2006

We started the year wondering how 2006 might treat investors after a pretty good 2005.  In fact, I featured two writers who looked at the same data and trends, yet arrived at different conclusions for the upcoming year.

So where are we now?

As Charles Dickens might say, "It was the best of times, it was the worst of times."

The year started out with a boom through about the end of April.  It felt like 1999 again.  Then the bottom fell out during May and June.  It felt like 2000 through 2002 again.

We've suffered through bouts of angst over inflation, a slowing economy, record energy prices, a talkative Fed chairman, terrorist plots here and abroad, hurricanes in the Gulf of Mexico, nuclear nutcases on the Strait of Hormuz, the war in Iraq/Afgahnistan, and the upcoming Congressional elections.  There is always plenty to worry about in this world.

After all of that, the market has managed to eek out some pretty decent gains year-to-date as reported in today's Wall Street Journal (subscription only).  Here is a summary:

•   7.90%  Dow Jones Industrial Average
•   5.80%  Large-Cap Stocks (S&P 500)
•   2.43%  Mid-Cap Stocks
•   7.79%  Small-Cap Stocks
• 12.22%  International Stocks (MSCI EAFE) excluding currency effects

Not bad considering where we've been this year.

Based on these numbers, a well-diversified stock portfolio ought to have performed right around 7% according to a quick back-of-the-envelope calculation.  How are your investments doing?

Who knows where we'll end up for 2006 but I'm sure there will be plenty of excitement in the months to come.  Let's hope the current trend continues.

Sep. 13, 2006 - Performance