Jeff Tjornehoj on "Business for Breakfast" 1060 KRCN Tuesday, September 26, 2006 - Closing In On the End of the Third Quarter
Q: Jeff, we're coming up on the "show me the money" time--how has the thirdquarter done?A: Overall, I'd say it was okay. Most funds are up 2%-3%--certainly notspectacular, but given how quiet things were over the summer, there wasn'tmuch opportunity for big movements in either direction. By my reckoning, ifyou made 4% in your stock fund you did well, so here are the winners sofar:
By Sector:
- Real Estate: 7.7%
- Telecom: 5.2%
- Utility: 5.1%
- Financial Services: 4.6%
- Health/Biotech: 4.5%
World Equity:
- Pacific ex-Japan: 5.9%
- China: 5.2%
- Global Large-Cap Value: 4.8%
- Emerging Markets: 4.4%
- Europe: 4.3%
U.S. Equity:
Q: Okay, we see several sectors up over 4%, and S&P 500 funds had a returnof only 4%. How's that?
A: There is a noticeable loser in the third quarter--energy. Many funds haveloaded up on energy this year, and that group is down almost 11%. So, allyou indexers out there have reason to be pleased with your shrewd judgment!
Q: And who made the loser's list?
A: Anything with "growth" in the name failed to impress. Although techfunds have managed a 3% return so far, investors haven't been excited aboutexpensive stocks--high P/E stuff, usually--and concerns about a slowingeconomy often weigh more on those stocks than the more down-to-earth,dividend-paying stuff.
But that wasn't confined to the U.S.: overseas, growth stocks have alsofailed to keep pace, and what we've seen in the U.S.--with largeoutperforming small--also held true across the globe. In addition, Japanesestocks continue to drift lower. After gold and energy they're the worstperformers, down 3.5%.
Q: Not too many money losers then--just middling returns?
A: Exactly. The market has had a slightly bullish tone, especially after itexpected the Fed to pause again, and then oil prices slid lower. But bothof those events were generally expected and priced in, so I'm not surewhere the next bullish event will come from in the fourth quarter. Maybeit'll be a rate cut.
Q: Okay, Jeff. Thanks for coming in.
A: My pleasure.
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