ADP Employment Change report

WELCOME ENCOURAGEMENT ON THE ECONOMY

Stocks gapped up at the open, continuing yesterday’s rally. The Dow is currently up 440 pts and the SPX is up 1.3%. The more cyclically sensitive sectors—industrials, financials, energy, tech—are up well over 2% in early trading. On the other hand, defensive sectors near all-time highs are selling off today (i.e. utilities, real estate). The VIX Index fell back to 16 and VIX October futures fell to 18. In other words, traders aren’t expecting a massive jolt of market volatility over the next 30-60 days. The reaction in commodity markets isn’t surprising: gold fell and copper rose. Even oil, which has had a hard time lately, is back up around $57.40/barrel in early trading. Bonds (except for high-yield “junk”) are selling off. The 10-year Treasury yield jumped back to 1.58% as the price fell. And by the way, over the last couple of trading sessions the yield curve turned positive.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

FED DAY!

Stocks opened modestly higher this morning (Dow +27 pts; SPX +.12%). Most market sectors are higher in early trading, led by energy, tech and real estate. Consumer staples & discretionary sectors, however, are in the red. Earnings announcements continue to push around individual stocks, but the market as a whole is waiting on the outcome of today’s Federal Reserve policy meeting for some direction. The bond market is moving higher this morning, with rates dipping. The 10-year Treasury yield is back down to 2.03%. Junk bonds are also in green, perhaps because traders expect the Fed to formalize the flip to monetary easing today (see below).


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

WAITING ON THE FED

Stocks opened sharply higher this morning (Dow +99 pts; SPX +.6%), probably because recent economic data (see below) encourages traders to believe the Federal Reserve will soon begin lowering interest rates.

Payroll processor ADP says the US economy generated 102,000 new jobs in the month of June. That’s a lot better than May’s 41,000 but it’s also less than economists were forecasting. The fear, of course, is that hiring activity is slowing, whether because economic growth is slowing or because we’re already at full employment. It’s true that there are more open positions than job seekers.

ISM’s Non-Manufacturing Index, which measures business activity in the service sector, fell to 55.1 in June from 56.9 in the prior month. The decline was a bit more than economists were expecting. And while any reading above 50.0 indicates continued expansion of activity, the index is down around a 2-year low. The index’s key forward-looking new orders component fell to 55.8, the lowest since December 2017. In both manufacturing and service sectors, overall business activity as well as hiring, cost inflation and new orders are slowing. A spokesman for ISM noted the trend and said surveys “reflect mixed sentiment about business conditions and the overall economy. A degree of uncertainty exists due to trade and tariffs.” However, business activity “continues to reflect strength.”

Investors are rightly concerned about the trade war’s impact on business investment. And today we learned that corporate capital spending continued to soften in May. New orders for capital equipment excluding defense/aircraft are up only 1% from year-ago levels. That compares with 7% growth a year ago. Still, Bloomberg points out that conditions aren’t as bad as many anticipated. At least business investment is still showing some growth. Perhaps some underlying resilience can be teased out of this report.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

MIXED SIGNALS ON THE ECONOMY

The major stock market averages opened slightly higher after Apple’s (AAPL) surprise earnings announcement (sell below). The Dow is currently up 39 pts and the SPX is just above flat. Not surprisingly, the tech sector is leading the way, up .8% in early trading. The defensive sectors are giving up yesterday’s gains (except, oddly, for real estate). The energy sector is down .8% on lower oil prices. WTI crude oil fell back to $63.40/barrel following a report showing higher than expected crude stockpiles. Bonds are gaining ground again today as yields tick lower. The 10-year Treasury yield is back down to 2.48%.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

STOCK RALLY EXTENDED, EXPECT TEST OF HIGHS

Stocks opened higher today, extending the recovery rally. The Dow is currently up 75 pts and the SPX is up .5%. The SPX is now only 1.5% away from its all-time closing high back in September 2018. Nine of eleven major market sectors are higher, led by materials, tech and communications services. Only consumer staples and energy sectors are lower on the day…


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

WAITING FOR THE NEXT CATALYST

WAITING FOR THE NEXT CATALYST

The major US stock market averages opened slightly lower again this morning (Dow -50 pts; SPX -.4%). We’re in a holding pattern with very little news. Healthcare and energy sectors are faring the worst, down more than 1%. Banks and transports are treading water. European markets are poised to close nearly flat, but China’s stock market continues to power ahead on expectations for a trade deal. In fact, CNBC reports President Trump is “pushing hard” to ink a deal in order to improve his chances of re-election. Commodities are slipping today as the dollar strengthens. WTI crude oil dipped slightly to $56.35/barrel. Bonds are trading a bit higher today as yields tick lower. Long term Treasury bonds are faring the best, with the iShares 20+ Year Treasury Bond ETF (TLT) up about .4%. The 10-year Treasury yield, which finally broke out of its tight range last week, is fading back toward 2.69%. That is to be expected—Treasuries should rise when the stock market falls.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

January 3, 2019

January 3, 2019

Stocks opened sharply lower after a profit warning from Apple Inc. (see below). The Dow is currently down 519 pts and the SPX is down 1.5%. Eight of eleven major market sectors are lower, led by tech (-3.6%) and industrials (-2%). The defensive sectors are in the green (real estate, utilities, consumer staples). European markets closed down about 1% and nearly all of Asia was down overnight. Commodities are mixed in early trading. WTI crude oil fell back slightly to trade around $46.30/barrel. Gold is up by .5%. Bonds are mixed in early trading. Corporates (both investment grade and junk) are lower, but Treasuries are moving higher. The 5-year and 10-year Treasury yields are down around 2.40% and 2.58%, respectively. Those are both around 1-year lows. The bond market is telling you there is no need for the Fed to raise rates during the first half of 2019.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

December 6, 2018

December 6, 2018

Stocks sank at the open despite better than expected economic data. For the first couple of hours, most major market sectors were down more than 3% before bouncing off the lows. This could be the correction’s capitulation flush. While the Dow was down about 770 points, it is now down 436 pts. The SPX is currently down 1.7%. The more defensive sectors (consumer staples, utilities) also dumped at the open but are trying to claw their way back. Foreign markets aren’t serving as a safe haven. European markets closed down more than 3%. Asian markets were down roughly 2% overnight. The dollar is weaker, but that’s not helping commodities, most of which are trading lower. WTI crude oil fell back to $50.60/barrel, but quickly bounced back over $51. Bonds are catching a bid as you might expect. The iShares 20+ Year Treasury Bond ETF (TLT) is up .6%. High-grade corporate bonds, which have lagged lately, are up as well today. Junk bonds continue to struggle. The 2-year and 10-year Treasury yields are down around 2.71% and 2.85%, respectively. The difference between those two yields, 14 basis points, is very small and that’s spooking equity markets. Looking back at the last two months, any volatility in rates has been greeted with fear. The market doesn’t like it when rates rise, and neither does it approve when rates fall. Both are somehow begin viewed as bad news.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

April 4, 2018

Stocks gapped down at the open after China announced the expected retaliatory trade tariffs on US goods. The Dow is currently down 49 pts and the SPX is flat. The Dow initially opened down 1.5% but is paring losses, probably because this headline shouldn’t come as a surprise to anyone. Don’t be surprised, therefore, if we end the session in the green. At the moment, consumer staples, consumer discretion and telecoms are faring the best. Industrials and energy sectors are performing the worst, down over .8%. The VIX Index is up to bit to trade around 22.3. VIX April futures, at 21.5, show backwardation. Oil is down a bit after a higher than expected crude inventory report from Cushing, OK. WTI crude is now trading at $63.30/barrel. Most other commodities (except gold) are down as well. Bonds are mostly unchanged today. The 5-year and 10-year Treasury yields are hovering around 2.60% and 2.78%, respectively.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

December 6, 2017

Stocks opened mixed today—the Dow and SPX are currently flat. Utilities opened lower but quickly about-faced and are up about .3%. Tech is rebounding roughly .7%. Telecoms and energy, however, are down 1% in early trading. European markets are poised to close lower and Asia was down overnight. UBS says it expects China’s economic growth to decelerate to around 6.5% next year. Not surprisingly, most commodities are in the red today. The Bloomberg Commodity Index is down about 1%. WTI crude oil is down 2% to about $56.30/barrel despite a draw-down in US oil inventories. Bonds are trading higher today after a two-week selloff. The 5-year Treasury yield is back down to 2.12% and the 10-year is down to 2.32%.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

October 4, 2017

Stocks opened mixed this morning (Dow +20 pts; SPX flat). Gold miners, biotechs and consumer staples stocks are modestly higher. In addition, interest rate sensitive sectors like real estate and utilities are rebounding a bit. On the other hand, technology, banks and industrials are modestly lower. WTI crude oil is flat on the day around $50.40/barrel. Bonds are slightly lower as yield tick higher. The 5-year and 10-year Treasury yields are hovering around 1.93% and 2.34%, respectively. 


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

August 30, 2017

The major stock market averages opened mixed this morning. The Dow and SPX are currently down 10 points and up .2%, respectively. Cyclical sectors are rebounding today (energy, financials, tech). Utilities, which recently hit a 1-year high, are fading. The dollar is a bit stronger today after some encouraging economic data, but is still down 9% year-to-date against a basket of foreign currencies. Commodities are mostly lower; WTI crude is hovering around $46/barrel. Bonds are slightly lower in price, higher in yield. The 5-year and 10-year Treasury yields ticked up to 1.72% and 2.13%, respectively. 


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

July 6, 2017

The major stock market averages sagged at the open (Dow -72 pts; SPX -.46%). This is become a familiar pattern; we may end the day in the green anyway. Real estate and telecoms are down more than 1.5% in early trading. The tech sector continues to slide and the PowerShares QQQ Trust ETF (QQQ) is now down 5.1% from its recent peak. WTI crude oil shot up over $46/barrel this morning as US oil stockpiles shrank more than expected. But the Energy Select SPDR Fund (XLE) is trading slightly lower at the moment. Chevron (CVX) and Exxon (XOM) are down after RBC Capital published a research report downgrading the integrated oil companies. Bonds continue to sell off and yields are moving higher. The 5-year Treasury yield ticked up to 1.96% and the 10-year is up to 2.38%. that’s good news for the bank stocks, which have been gaining momentum over the last 4-5 weeks. 


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

June 1, 2017

Stocks opened higher this morning (Dow +50 pts; SPX +.4%). The cyclical sectors (materials, energy, financials, industrials, consumer discretionary) are leading the way. Biotechs are up 1.4% in early trading, and the retailers and transports are up .3% to .5%. The dollar is a bit stronger against a basket of foreign currencies, and most commodities are trading lower. WTI crude oil is up a bit to $49.10/barrel. Bonds are mostly unchanged. The 5-year Treasury yield is hovering around 1.76% and the 10-year is trading at 2.22%. Economist Mohamed El-Erian of Allianz says the market has priced in a 90% chance that the Federal Reserve will hike interest rates when it meets later this month.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

April 5, 2017

Stocks gapped up at the open (Dow +115 pts; SPX +.5%; Nasdaq +.36%). Ten of eleven major market sectors are in the green, led by the cyclicals (tech, industrials, consumer discretion). The VIX Index is back down to 11.2 after having traded up to 13 a couple of weeks ago. By the way, the VIX (which measures fear among traders) for almost five months. The dollar is flat today and commodities are mostly higher. WTI crude oil is trading up to $51.20/barrel. Bonds initially sold off but are now moving higher on the day. The 5- and 10-year Treasury yields are currently at 1.88% and 2.36%, respectively. Remember, lower bond yields in this market environment imply lower economic growth expectations. So ideally, we’ll want to see yields float gradually upward in the coming months.  


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

March 8, 2017

Stocks opened mixed this morning despite a better than expected jobs report. The Dow is down 20 points, the SPX is flat and the Nasdaq is up .2%. The job report pushed bonds and interest rate sensitive sectors lower. So utilities, telecoms, REITs and consumer staples are down in early trading. The cyclical sectors, on the other hand, are up (materials, financials, tech, consumer discretion). The same report also pushed the VIX Index lower, now trading around 11. Remember, traders are anxiously watching the VIX for signs of a stock market correction. Not to belabor the point, but the prospect of better economic data—and thus higher interest rates—is also strengthening the dollar and weighing on commodity prices. WTI crude oil is down 1.6% to $52.20/barrel. Bonds, as I said, are lower in price, higher in yield today. Don’t miss this: the 5-year Treasury yield spiked to 2.10%, which is the highest level since the spring of 2011. The 10-year Treasury yield is up to 2.57%. 


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

February 1, 2017

The major market averages gapped up at the open but quickly turned around. The Dow is up 22 pts and the SPX is flat. Banks and semiconductors are leading the way, each up nearly 1%. Utilities, on the other hand, are giving back yesterday’s gains. The VIX Index is collapsing back down under 12 and that’s giving the market room to rise. Remember, the moment the VIX begins to rise toward 14-16 short-term traders will be selling. The dollar is up today (maybe due to better than expected economic data) and yet commodities are higher as well. WTI crude oil is trading up over $53/barrel. Bonds are selling off, reversing yesterday’s gains. The 5-year and 10-year Treasury yields are back up to 1.97% and 2.50%. In some respects, capital markets have been without trend over the last month. A Trump Rally built on hope must now give way to other more concrete factors like earnings season and economic data. 


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

January 5, 2016

The major stock market averages opened lower this morning (Dow -72 pts; SPX -.3%). Consumer staples is the only sector hanging onto to a small gain. The banks are off by 1% in early trading. However, quite a few individual stocks are up on the day: Amazon, Aetna, Alphabet, Facebook and Honeywell, for example. The VIX Index—a measure of fear among traders—continues to dive and is now trading under 12. That’s considered very low. The dollar is weaker for the second consecutive session after reached a 14-year high at the end of 2016. Some give-back is normal, but we also understand China is moving to strengthen its currency. Anyway, that’s helping commodities rally. Gold, copper and oil are higher on the day. WTI crude is trading up to $53.80/barrel, hovering around a 1 ½ year high. Bonds are rallying as yields tick lower. The 5-year Treasury yield shot up to 2.09% by mid-December but have since fallen back to 1.88%. The chart pattern for the 10-year Treasury is the same; the current yield is 2.39%. 


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.