Second Quarter and Year-to-Date Returns for Our 6 Asset Classes

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For most investors, following market volatility does not bring peace of mind. There are always a number of financial headlines in the spotlight. Alas, by the time the headlines reach national attention, the markets have already moved in response and limited any use you could make of such information.  This past quarter was full of big headlines.

Greece’s default is newsworthy, but the country has spent over half of its modern existence in default, defaulting five other times since 1800. The Chinese economy is sputtering, which means it may only grow at 7% this year. Commodities remained weak, in part due to China’s slowdown and the strength of the U.S. dollar. For the same reason, resource stock returns were down as were resource-rich countries like Canada, Australia, and Chile.

Most bond funds had a negative quarter. The Barclays Global Aggregate Bond Index was down 1.2% and most bond funds underperformed that index.

Here are the Second Quarter Returns of iShares ETFs representing our six asset classes:

2nd Quarter 2015 Asset Class Returns

Despite the headlines, the global equity markets posted gains last quarter and for the year. The S&P 500 Index was up 0.26% for the quarter and 1.23% year-to-date. Even with Greece’s troubles, the MSCI EAFE All Cap Index of developed foreign markets (which includes mid and small cap) was up 0.30% for the quarter and 4.57% year-to-date—outpacing the US. Even with the weakness in the Chinese economy, the FTSE Emerging Markets Index was up 1.13% for the quarter and 3.44% year-to-date.

Here are the year-to-date Returns of iShares ETFs representing our six asset classes:

Year-to-date Asset Class Returns

Yesterday’s post on The Behavior Gap written by Carl Richards is one of the best books to encourage leaning against the emotional reactions we all have to volatile markets.

Even with market turmoil (or especially with market turmoil), it is best to stay the course and rebalance your portfolio back to your target asset allocation. Volatility and asset classes that move in different directions is what boosts the rebalancing bonus.

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David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. Favorite number: e (2.7182818...)

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Austin Fey is a Wealth Manager at Marotta Wealth Management, specializing in charitable giving and asset allocations. She is a regular contributor to our Marotta On Money articles, often giving advice to those just getting started in finance.

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