Stocks resumed their winning ways for the week ended May 22, 2020. The market got off to a strong start after Moderna announced positive results for a Covid vaccine, although those results were later called into question. Nonetheless, investors cheered the fact that jobless claims in the US, while still over 2 million, continued to decline. Buyers also got a boost from comments made by Fed Chairman Powell indicating that the Federal Reserve still has powder ready to help shorten or curtail the recession that is already underway. Although they spiked lower early in the week, bonds ultimately fell moderately as the US 10-year treasury yield ended the week marginally higher at 0.659%, according to MarketWatch.
Geographically, the US fared best, although Non-US Developed shares weren’t far behind. From a factor perspective, no factors were able to beat a simple market index this week, although Quality had a strong week. The long-term results continue to demonstrate factor efficacy, as shown in the table to the right. As can be seen, for the YTD, 3-Year, 5-Year, and 10-Year periods, 3 of 5 factors do better than the market. Over 15 years, 4 out of 5 win.
In The News
Please click here for a piece that looks at stocks and bonds moving the same direction and what that tells us.
Please click here for an article with comments from the late (great) Jack Bogle on why 401k savings aren’t enough.
Please click here for a link to the IRS website detailing traditional and Roth IRA contribution limits and taxability.
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s). Moreover, you should not assume that any of the above content serves as the receipt of, or as a substitute for, personalized investment advice from Metric Financial.
USA is the MSCI USA index, Non-US Developed is the MSCI EAFE index, Emerging Markets is the MSCI Emerging Markets index, and All Country World is the MSCI ACWI index. One cannot invest in an index. Because the factor indexes have varying inception dates, some of the returns provided are back-tested and do not represent actual performance. Inception dates are as follows:
Momentum = MSCI ACWI Momentum NR USD Index (Inception: 11/30/95)
Value = MSCI ACWI Enhanced Value NR USD Index (Inception: 5/29/15)
Quality = MSCI ACWI Quality NR USD Index (Inception: 5/29/92)
Low Volatility = MSCI ACWI Minimum Volatility (USD) NR USD Index (Inception: 5/28/93)
Size = MSCI ACWI Risk Weighted NR USD Index (Inception: 4/6/11)
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Returns for global market and factor indexes. As of 05/22/20.