Insightful Investing

This month we are going to start out with ETFs because that is where all the action was. The iShares Silver Trust (SLV) gained a whopping 13.5% in November, outpacing everything else by a considerable margin. Surprisingly, next in line was SPDR S&P Retail (XRT) which picked up 8.0% in October, followed by Energy Select Sector SPDR (XLE), which returned 5.9%. The strong US dollar pushed the PowerShares DB US Dollar Index Bullish (UUP) up by 5.1%.

In November the strongest performers in the US stock market were iShares S&P Mid Cap 400 Growth Index (IJK) and iShares S&P Small Cap 600 Growth (IJT) which both gained 4.6% for the month. In contrast, SPDR Dow Jones Industrial Average (DIA) actually lost -1.0%.

There were no positive signs on our list of Exchange Traded Funds, something we have not seen in quite some time. Thanks to the strong US dollar and the resurgence of European soverign debt problems SPDR Barclays Capital International Treasury Bond (BWX) lost -6.8%, SPDR DB Internatioanal Government Inflation Protected Bond (WIP) dropped 5.4% and PowerShares Emerging Markets Sovereign Debt (PCY) fell 4.6% in November.

Most of our Mutual Funds followed their respective markets, but there were a few surprises, mostly on the good side. The leader of our Small Cap Growth Funds was FBR Small Cap Investor (FBRYX) which gained 5.2% Mid Cap Growth Funds Westcore Select (WTSLX) and CANSLIM Select Growth (CANGX) picked up 3.6% and 3.3% respectively. The big surprise in stock mutual funds was Wasatch Emerging Markets Small Cap (WAEMX) which actually gained 0.40% while everything else with an international flavor lost ground in November.

Now for the not so good news, which showed up mostly with both stock funds and bond funds that are invested outside of the US. Dreyfus International Bond (DIBRX) took the worst of it, falling -5.2% in November, in contrast to PIMCO Foreign Bond (USD-Hedged) D (PFODX) which lost only 1.0% this month, thanks to its hedge against the rising US Dollar (an approach that has actually hindered its return over the last several years). As one might expect in a falling market, both Fidelity New Markets Income (FNMIX) and Payden Emerging Markets Bond (PYEMX) dropped 3.25% this month, which was less than a their passive benchmark. While all but one of our International Stock Funds fell this quarter, the loss of -3.7% by Manning and Napier World Opportunities (EXWAX) was less than its benchmark as well, something all of these funds were able to achieve.

Our December 2010 Mutual Fund Portfolios, ETF Investment Portfolios, and Best Fidelity Funds have been updated through November 2010. The Mutual Funds in our Mutual Fund Portfolios are chosen from our 50 Best Mutual Funds. The ETF’s in our ETF Investment Portfolios are chosen from our List of 100 Best Exchange Traded Funds. The investment performance history of our mutual fund portfolios and ETF investment portfolios are tracked on our investment portfolio performance page.

Once again stocks started the month off strong, but that only lasted a week before more troubles in Europe took equities back down to where they started the month. While you had to look closely to find the gain for the S & P 500 this month, it did match the microscopic gain of T-Bills at 0.01%. That being said, there was actually considerable volatility in the financial markets, that resulted in considerable divergence of returns.

In the US, Small was a good theme, and adding Growth to that made your investments turn out even better. Small Cap Growth stormed ahead with a gain of 4.5% in November, considerably more than Large Cap Stocks, which we mentioned earlier ended up going absolutely nowhere. On the other hand, the resurgence of problems with European sovereign debt helped the US Dollar thanks to considerable pressure on the Euro. The result was a considerable fall in International stocks, which lost -4.2% this month.

Interestingly, the typical flight to quality during times of turmoil approach would not have helped you in November as US bonds actually lost somewhere in the neighborhood of -1.0% for the month. International Bonds had an even worse time, dropping -3.5%, thanks to both the stronger dollar and the European financial instability. Keeping with the unusual nature of this month, the place to be in November turned out to be Precious Metals (Silver in particular), Retail, and Energy.