April Update

WOW, thank heavens that quarter is over! One of the worst quarters ever in the the market's history. Let's recap what happened: S&P500 down 9.92%, NASDAQ down 14.07%, Large Cap Growth -10.18% and Value -8.72%. Small caps lag with Growth down 12.83% and small cap value -6.53%. International sector was down 8.82%. The only thing that was up were commodity funds and bonds.
The good news is for anyone with HELOCs, rates have come down. The Prime Rate is at 5.25% and LIBOR is 2.71%. Mortgage rates have not come down as much. The published rate for 30 year fixed mortgages is at 5.37% and for jumbo mortgages (amounts greater than $417,000) the published rate is 7.19%.
One interesting article I read recently discussed the investment allocation of endowment funds. This topic is always one of fascination because many of the larger endowment funds have had excellent long term returns and so the managers investing these assets are usually held in high regard. The article pointed out that some endowment funds (Yale in particular) have reduced if not completely eliminated their exposure to fixed income securities arguing that historical bond returns can not be supported given the current low level of rates. How then, is one to diversify risk? The answer is in the long-short funds. A long-short fund essentially eliminates market risk buy being long some stocks and being short other stocks. One fund that has done well with this strategy is the Hussman Strategic Growth fund. Since 2001, the fund has had positive returns every year, including so far this year. While past performance is not guarantee of future results, this track record gives me a strong inclination that the manager, John Hussman, knows what he is doing.
On a non financial note--a recent University of Michigan study indicates that having a husband creates an extra seven hours of housework each week for women and that getting married saves a man about an hour a week in housework. It's nice to know there is an actual study that affirms what I have known to be true for a decade.
Thanks for reading.