Insightful Investing

US stocks were the quietest category of all with only a couple of Stock Funds picking up more that that 2% in November as Fidelity Small Cap Discovery (FSCRX) added 2.3% and Westport R (WPFRX) gained 2.2%. On the down side, Royce Micro Cap (RYOTX) fell 2.2% this month. International stocks did not fair as well thanks to continued turmoil in Europe resulting in a stronger dollar. Fidelity International Growth (FIGFX) lost the least with a drop of 1.4%, while Harding Loevner International Small Company (HLMSX) lost 4.4%.

For the most part, Bonds hand a more difficult time than stocks, although Fidelity Inflation-Protected Bond (FINPX) did manage to pick up 0.6% in November. High Yield Bonds took the biggest hit with Artio Global High Income (BJBHX) falling 2.8%. International Bonds were not far behind as Dreyfus International Bond (DIBRX) dropped 2.6%.

As usual, there was a little more action in ETFs, in particular those with a sector orientation. Interestingly SPDR S&P Homebuilders (XHB) was up 5.8%, while PowerShares DB Energy (DBE) gained 3.4% and Consumer Staples Sector SPDR (XLP) added 3.1%. While iShares S&P SmallCap 600 Value Index (IJS) was our big US Stock ETF gainer in Noverber by rising 1.5%, SPDR S&P Dividend (SDY) was not far behind with a gain of 1.3%. This ETF has been one of the better performers for the year, up 6% in 2011 thanks to it significant dividend. Technology stocks took the biggest hit for the month as PowerShares Nasdaq 100 (QQQ) fell 2.7% in November.

Internationally, Market Vectors Russia ETF (RSX) added 2.5%, while iShares MSCI South Africa Index (EZA) rose 2.2% in November. On the other hand, it was an even more difficult market for stocks in South American than Europe as iShares MSCI Chile Index (ECH) fell 6.4% and iShares MSCI Brazil Index (EWZ) dropped 5.4%.

Like Mutual Funds, Government Bond ETFs faired better than International Bonds and High Yield, led by a gain of 2.0% by iShares Barclays 20+ Year Treas Bond (TLT). SPDR Barclays Capital International Corporate Bond (IBND) fell 6.2%, while SPDR Barclays Capital High Yield Bond (JNK) dropped 2.8% in November.

Our December 2011 Mutual Fund Portfolios, ETF Investment Portfolios, and Best Fidelity Funds have been updated through November 2011. The Mutual Funds in our Mutual Fund Portfolios are chosen from our 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.

If you only looked at the final results, you might think that nothing happened in the financial markets during November, but nothing could be further from the truth. While the volatility was not quite as bad as August through October, the roller coaster ride in November produced similar results as Large Cap Stock investors lost only 0.2%. Once again, it was events in Europe that influenced financial markets all over the world. The US economy continues to show some signs of improvement, domestic markets are still being held hostage by events happening overseas.

In the end, not much happened to stocks in November. All categories of US stocks lost less than 1.0%. The biggest hit domestically was taken by REITS, which fell 3.8% for the month. Interestingly, High Yield Bonds had a tougher month than stocks, dropping 2.2%, thanks to the flight to quality that drove up Long Treasury bonds by 2.7%.

International stocks had a significantly more difficult month than those in the United States. Emerging Market Equities fell 6.7%, while the overall international market fell just 4.8% in November. You should continue to take the opportunity to rebalance your portfolio to its target allocations on those occasions that stocks react poorly to events over in Europe.