Stock Market Dominance Continues:
Stocks again posted very positive returns during the second quarter of 2021. The US Stock Market was up over 8% and International and Emerging Markets were up over 5% as you can see in page 3 of the attached Quarterly Market Review.
In the United States and International Developed Stock Markets, large company growth stocks were the highest performing asset class last quarter as you can see on pages 8 and 9. The price of growth stocks tends to be high while the price for value stocks tends to be low. Over the long-term, we expect value stocks to outperform growth stocks. Even though that has not happened over the last decade, value stocks have outperformed growth stocks over the last 12 months in the United States, International Developed and Emerging Markets Stock Markets as you can see in pages 8-10 of the report.
Bonds Posted Positive Returns:
It wasn’t just stocks that posted positive returns last quarter, bonds also increased in value as you can see on page 3. Also on that page you can see that during the first quarter of this year, the US Bond Market was down 3.4% and International Bonds were down 2.7%. We were glad to see that the tide turned this quarter, and the returns were positive, even if just slightly.
Inflation on the Rise?
On Page 18 and 19 of the attached Quarterly Market Review you can read an article with a conversation with Eugene Fama, a Nobel Laureate, regarding his thoughts on predicting inflation. In this article, he states, "We haven't been in a period of high inflation, or even moderate inflation, for at least 10 years, so I'm not particularly concerned that inflation will be high soon." Inflation is on the rise, and you can expect to see additional resources from us on this topic in the future.
See full Market Review of Second Quarter 2021 here: