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 A Quarter to Forget -- Stocks hit their 2010 highs in late April yet by the end of the quarter they were at their 2010 lows. Four of our six model portfolios managed to stay ahead of their benchmark indexes, but none could stay in the black.
The Value of Market Timing -- Model Portfolio 5 is a trading model that's had a great history against its benchmark index. But how much has market timing really helped it? Actually, it all depends on what you're looking for.
What Won't Heal the Economy -- There are a lot of things that can be done to get the U.S. economy back on track, but vilifying Wall Street isn't one of them. Too bad that's the approach our leaders are focusing on.
S'Wonderful, S'Marvelous, SMID -- The fact that some managers don't fit into narrowly defined style or capitalization category should not be counted as a strike against them -- particularly when they're small cap managers.
 Don't be scared by the name. Sure it sounds like something you tried to avoid in high school, but there really is something to it. Here -- in plain English -- is how you can make math work for you in portfolio construction.
Why rely on value, or growth, or any particular style for that matter? There are good reasons to consider each of these approaches -- and they're not as different as you might think.
Any monkey -- or even mutual fund manager -- can pick a bunch of stocks, but can they really build a portfolio? Here's how you can.  If you're a regular visitor, you might want to know what changed since the last time you were here. Look no further.
Unlike some of those newsletters you pay for that always tell you how wonderfully some of their selections did, we show you the whole shooting match.
The old page museum where you'll find previous commentary ("Stating the Obvious"), economic forecasts ("True Facts"), and evolution of our quant models ("Work in Progress"). Nothing's changed although dead links have been removed.  For the Week Ending July 30, 2010 Despite all the ups and downs along the way, stocks finished July essentially where they started January. Most major indexes are virtually flat as far as 2010 price appreciation. Early in the year it looked like the market was poised to continue 2009's remarkable run-up, but the past few months sent the indexes into the red as confidence wavered. Now we're back at square one. But that doesn't mean things haven't changed since January. On the contrary, the outlook is vastly different. In January it looked like the economy was well on its way to recovery. Stocks, generally a leading indicator, had been on a tear and there were indications earnings would soon follow. This rosy outlook was further supported by improving fourth quarter earnings and growing stability in the financial markets. While virtually no one thought 2010 would be smooth sailing, the general consensus expected the rebound to gain strength, particularly in the second half of the year. Well, now it's the second half of the year -- one month in, as a matter of fact -- and things look quite different now. Rather than enjoying that building rebound, evidence is mounting that the economy is once again slowing. Last week the Fed's Beige Book of economic activity showed declines across the country through early July. Yes, second quarter earnings have been up, but top-line growth remains anemic and reporting companies aren't particularly optimistic. Unemployment remains high and is expected to stay that way well into 2011 and possibly beyond.
The effects of last year's fiscal stimulus (if there were any) are starting to wear off. The Fed is just about out of conventional monetary alternatives. Taxes are set to rise if the democrats stick to their pledge to allow the Bush tax cuts to expire in the New Year. Small businesses are afraid to hire or invest not knowing the extent of their obligations under the coming health care reform. This is definitely not the robust recovery scenario that seemed so likely six or seven months ago. As a result, investors need to rethink their positions. Risk trades aren't nearly as attractive as they were earlier when they were expected to leverage the rising equity tide. Instead, larger, safer stocks are now more appealing. Not only can they better withstand heightened regulations, they are also better equipped to deal with the increased costs of Obamacare. In an environment when growth may be difficult to achieve, their dividends will be much more appreciated. Defensive sectors such as utilities and consumer staples may now be the best short-term bets. Their steady demand can keep them afloat in a slowing economy. In fact, as opposed to earlier this year, stocks may not be such a compelling buy. At 12.5x earnings, they aren't particularly cheap in an historical sense. On the other hand, bulls point out today's remarkably low interest rates help justify higher P/Es. Even so, how long do you expect that to last? These are the questions investors need to answer in the next month or so. Given the late spring's sharp sell-off, they're lucky to be in the position to begin 2010 again from zero. Most didn't do so well in the first part of the year so now's their chance for a do-over. Savvy investors won't blow it.
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Source: S&P ComStock