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.
Thursday, February 02, 2006
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