January was a very positive month for my hypothetical model long-term portfolio as shown in the chart below (click on the chart to see a bigger version). During January, the value of the portfolio increased 6.26% from the $100,000 starting value to $106,263,79. As previously discussed, the purchase price for each of the funds/ETFs in the hypothetical model portfolio as the actual December 31, 2005 closing prices of each of these equities minus any applicable trading commissions or other fees.
Small and mid-cap stocks outpeformed their larger counterparts, such as those in the S&P 500. However, the real stars from January 2006 were foreign stocks. Emerging markets did particularly well with EEM returning over 14% and TRF advancing close to 21%.
I think that the market is probably due for a little bit of a pullback, but I do think that 2006 will be a better year for stocks than 2005. With the prices of commodities still increasing, I expect TRF and EEM to continue to outperform this year because both of these equities hold the stocks of many companies that export commodities such as oil.