The S&P 500 settled with a weekly loss of 0.4%. Despite that slip, the stock market finished February with a 2.8% monthly gain. Not bad concidering the talk at the beginning of February was a market correction was coming. While the markets ended February with a slight gain, we are still not total bullish at this point.
Investors were generally unmoved by the revised fourth quarter GDP numbers. The headline growth rate was upwardly revised to reflect 5.9% annualized growth rate, which exceeded expectations, but the personal consumption component increased at a softer-than-expected clip of 1.7%. Core personal consumption expenditures increased at a faster-than-expected quarter-over-quarter clip of 1.6%, though.
Existing home sales for January made a surprise 7.2% month-over-month drop to an annualized rate of 5.05 million units. Meanwhile, the final February Consumer Sentiment Survey from University of Michigan was little changed at 73.6 and in-line with expectations.
As you know from previous posts, the fund of Funds Portfolio was in cash all of February. With a small market gain of 2.8%, all was not lost being out of the market. To update for March, we have two asset categories to enter. The first is Vanguard REIT Index (VNQ) which crossed above its 100-day moving average in February. This fund has a year to date market return of 13.65%. The second FOF asset to enter is the Vanguard Small cap Index (VB) which is up 22.6% YTD. Both of these funds are showing out timing indicator to re-enter with 20% of your FOF Portfolio in each position. The other 60% of this portfolio should be in cash or maney market positions until the end of March.
Details of the Fund of Funds Portfolio is here.
