Bureau of Labor Statistics (BLS)

JOB MARKET QUESTION MARK

Stocks opened lower this morning (Dow -83 pts; SPX -.45%). Surprisingly, the energy sector surged 1.6% in early trading along with oil prices. Industrials and materials are also modestly higher. Most everything else is lower on the day. The real estate sector sank nearly 2% on rising interest rates, but for some reason the banks aren’t spiking. Usually those two groups are mirror images of one another on days when interest rates move sharply. Most commodities are trading higher. WTI crude oil is up 1.4% to trade at $58.60/barrel. Bonds are selling off and yields are moving higher. With the massive run-up in bonds this year, a correction makes a lot of sense even if the longer term direction of rates is still lower. The 10-year Treasury yield shot up to 1.67% from 1.56% last Friday.


*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.

JOBS REPORT SPURS DEBATE ON HEALTH OF THE ECONOMY

Stocks opened modestly higher this morning (Dow +70 pts; SPX +.14%). Small gains are broad-based across consumer-facing sectors, as well as financials, healthcare, industrials, materials and real estate. Only utilities, communication services and tech are left out with small losses. Commodities are trading lower. WTI crude oil fell back to $55.70/barrel; copper fell .5% and iron ore is down something like 3%. Only gold (+.14%) is higher on the day. The bond market is modestly higher in today’s trade. The 10-year Treasury Note Yield is unchanged at 1.55%. Bonds have done well this year due to the sharp decline in rates. The iShares 20+Year Treasury Bond ETF (TLT) is up nearly 20% and the iBoxx High Grade Corporate Bond ETF (LQD) is up 13%. And in case you’re wondering, no it is not normal for both the stock and bond markets to post 10-20% returns over the same 8-month period.


*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.

FOCUS ON INFLATION & THE FED

Stocks opened mixed this morning (Dow -13 pts; SPX +.2%, Nasdaq +.5%). The best performing groups in early trading are semiconductors and biotechs, both up about 1%. Banks are being dragged down by the theatrics of congressional testimony by major bank CEOs today. Retailers and industrials are also down a bit. The dollar is stronger against a basket of foreign currencies after the European Central Bank (ECB) reiterated warnings over slower economic growth and said it plans no interest rate hikes in the foreseeable future. WTI crude oil bounced back toward $64.20/barrel today despite the stronger dollar. Bonds are trading higher as well. The 10-year US Treasury yield backed down to 2.4% after today’s economic reports (see below). The iShares 20+ Year Treasury Bond ETF (TLT) is up .27% and the iShares Investment Grade Corporate Bond ETF (LQD) is up .3%.


*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 4, 2019

January 4, 2019

The stock market gapped up at the open after an encouraging jobs report (see below). The Dow and SPX are currently up 650 pts and 3%, respectively. Tech—hated by traders yesterday—is the best-performing sector, up over 3.5%. The materials sector is up 3% in early trading. Transports—again, hated yesterday—are up over 3% as well. The VIX Index is back down to 22.7, exactly even with VIX January futures. Traders are wondering why, when the market is now routinely moving more than 2% per day, the VIX isn’t well into the 30s. It may no longer be an accurate reflection of market volatility. European markets will close up over 2% in today’s session. The Chinese stock market has stabilized over the last several days, so that’s good news. After the release of the jobs report this morning, the dollar strengthened and bonds sold off. Opposite of the recent trend, Treasury bonds fell in price but junk bonds rose. The 10-year Treasury Note yield climbed back to 2.66%, surging 10 basis points from yesterday’s level. Bond yields provide different signals depending on the economic & market situation. At this moment, rising yields will signal some relief that perhaps the economic outlook isn’t as dire as the bears think.


*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 7, 2018

December 7, 2018

Stocks headed lower again today (Dow -550 pts; SPX -2%). Ten of 11 major market sectors are down, led by tech (-3.1%). Utilities is the only bright spot +.6%). The VIX Index is back up to 24. WTI crude oil shot up toward $52.60/barrel after OPEC agreed to cut back oil production targets. Globally, oil is temporary over-supplied due to geopolitical events and government manipulation. Crude tumbled from roughly $76/barrel to $50/barrel in just 2 ½ months. Bears are taking this as a sign of an economic slowdown.


*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, 2018

October 4, 2018

Stocks sank at the open on Fed/interest rate fears. The Dow is currently down 255 pts and the SPX is down .9%. Bank—and strangely enough utilities—are just about the only groups posing gains in early trading. Consumer discretionary, healthcare, technology and telecommunications sectors are all down more than 1%. The VIX Index is back up around 13.3, as you might expect. European stock markets are down between .8% and 1.2% in today’s session. Most of Asia was down overnight with the notable exception of China, which saw gains of about 1%. The dollar is flat on the day and commodities are mostly lower. Bonds are also selling off as yields rise. The 10-year Treasury yield just climbed to 3.20% for the first time in seven years. And since short-term yields aren’t up as much, the yield curve is the steepest it has been in two 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.

June 6, 2018

Stocks opened higher again this morning (Dow +224 pts; SPX +.4%). Financials are rebounding over 1.5% as interest rates head higher. So not surprisingly, the utilities sector is down over 1.5%. Emerging markets funds are up 1% today and look to be recovering a bit from a beating in recent weeks. The dollar, which has been falling over the last week or so, is giving overseas stocks some breathing room. The VIX Index continues to slide, now trading under 12, suggesting little fear among investors. Commodities are mixed, with WTI crude oil down another 1% to trade around $64.80/barrel. Recall that oil was over $70 a couple of weeks ago. Bonds are selling off as yields tick up. The 5-year and 10-year Treasury yields are back up to 2.81% and 2.97%, 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.

September 1, 2017

Stocks opened higher despite weak economic data (Dow +52 pts; SPX +.2%). Banks, semiconductors and transports are leading the way. Utilities and healthcare sectors are modestly lower. WTI crude oil is trading flat around $47.17/barrel. Storm flooding around Houston has shut down some oil refineries, and since there are very few of them around the country, gasoline prices are spiking. The national average price is up to $2.51/gallon from $2.33 before the storm. Bonds are down in price, up in yield today. The 5-year Treasury yield ticked up to 1.74% and the 10-year yield is trading at 2.16%.


*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.

August 22, 2017

Stocks closed higher today (Dow +196 pts; SPX +1%). All sectors, especially cyclical sectors (technology, materials, financials, and consumer discretionary), were up today except for real estate. Real estate was down .2% while technology increased 1.5%. Volatility (VIX) earlier spiked to 15.5 but today is back down under 12. CNBC attributed today’s market run to optimism surrounding progress on tax legislation by Republicans. It is noteworthy that BMO’s Chief Investment Officer noted that Congress’ attempts to move forward have been obscured in the day-to-day political noise we have been accustomed to. The dollar is stronger today. WTI crude oil is up slightly to $47.64/barrel. Bonds are trading slightly higher in yield, lower on price. The 10-year Treasury yield is back above to 2.2% after dropping to its low of 2.14% in mid-June.  July’s inflation (CPI) was at 1.7% since 2014 we have not had July inflation over that level. 

As mentioned above, notable movers today were Cisco (+1.9%), Disney (+1.6), Pfizer (+1.2%). The only down sector is represented by Toll Brothers, dropping -2.6% after announcing disappointing revenue for last quarter just before the market opened.  It is now at its early May 2017 price.

A few weeks ago, bond manager Jeff Gundlach announced a reduction in speculative bond holdings (high yield and emerging market bonds…). Bloomberg recently noted that firms representing over $1 trillion of bonds assets have also announced (afterwards) that they have reduced their own portfolio credit risk levels down as well. It is unlikely that this is due to what Ray Dalio of Bridgewater claims is a rising geopolitical risk, but the fact remains the market has been reaching for more speculative bonds to maintain their portfolio yields and pushing bond premiums beyond historical norms (i.e., creating risk).  He says no one believes the Trump Administration will be able to push through tax reform. 


*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.

May 16, 2017

Stocks gapped up at the open this morning but quickly faded. The Dow is currently trading down 10 pts and the SPX is down .1%. Technology and consumer staples sectors are up modestly, but all other sectors are lower. There are a few sub-groups of stocks in the green, including semiconductors and gold miners; most retailers are down after Dick’s Sporting Goods (DKS) reported weak first quarter results. The VIX Index is hovering around 10.5, so no change there. The dollar is a bit weaker; Bloomberg reports the dollar has fallen back to pre-election levels. Many investors don’t believe President Trump’s pro-growth political agenda will pan out. Commodities are mixed and WTI crude oil is unchanged at $48.85/barrel. Bonds are rising in price again, falling in yield. The 5- and 10-year Treasury yields are back down to 1.83% and 2.31%, 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.

April 7, 2017

Stocks opened flat this morning, which is a wonder given the payroll report and last night’s missile strike in Syria. Unlike yesterday, the defensive sectors of the stock market are leading (utilities, telecom, consumer staples). Among the cyclicals, only semiconductors and defense contractors are in the green. The VIX Index is trading up to 13.2. Not surprisingly, gold is up on the day and WTI crude oil is up to $51.90/barrel. Bonds are trading up in price, down in yield as you would expect given the events listed above. The 5- and 10-year Treasury yields are down to 1.86% and 2.33%, 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.

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.

December 2, 2016

Stocks opened modestly higher (Dow -10 pts; SPX +.17%%; Nasdaq +.17%). Today is sort of the mirror image of yesterday’s session. Interest rate-sensitive sectors like utilities and real estate are up big while the cyclical sectors like financials and consumer discretion are lagging. The VIX Index is down a bit to 14. And bonds are up in price today. The 5- and 10-year Treasury yields ticked down to 1.83% and 2.39%, respectively. WTI crude oil, on the other hand, continues to drive higher, now trading around $51.20/barrel. Commodity traders are really taking this OPEC production deal seriously…for now.


*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 3, 2016

Stocks gapped down at the open (Dow -52pts; SPX -.4%) in the wake of a disappointing jobs report. The reaction is classic risk-off: defensive sectors are rising and cyclical sectors are falling. Financials (esp. banks) are down the most in early trading. The dollar is weaker (-1.4%) and commodities are mostly higher. Gold is up over 2%. But WTI crude oil is trading down to $48.70/barrel. By the way, US oil production has been falling for 12 straight weeks, and that’s helping prop up oil prices. Bonds are surging ahead because the weak jobs figure makes it less likely the Fed will raise interest rates later this month. The 2-year Treasury yield fell to .78% (from .89%) this morning. The 5- and 10-year Treasury yields fell to 1.23% and 1.71%, respectively. We see technical support for the 10-year at 1.69 – 1.70%. 


*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 30, 2016

Stocks gapped up this morning, following on the heels of yesterday’s Fed-induced rally. The Dow and SPX are currently up 131 pts & .7%, respectively. The tech sector is up over 1%, with financials right behind. Telecoms and utilities are down modestly. We’re seeing big gains today in semiconductors, banks, insurance companies, and Apple (AAPL). In fact, CNBC is reporting that Apple is no longer in a “bear market,” having rallied about 20% from its recent bottom. In addition, General Electric (GE) stock is back up to nearly $32/share, a level not seen since 2008. WTI crude oil is up modestly to $39.30/barrel and most other commodities are up on the day. Bonds are selling off a bit, with the 5- and 10-year Treasury yields trading up to 1.30% and 1.85%, 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.