September: Cruelest Month So Far

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 |  Includes: EEM, EFA, RWR, TIP
by: James Picerno

Thank goodness September's gone. Although it's passed into the history, the legacy will long linger, in our minds and wallets.

Indeed, September 2008 was ugly. Really ugly. There was no place to hide other than cash. It was just one of those months and it didn't really matter what you did or what you owned save for T-bills or the closest equivalent. Even our CS Global Market Portfolio Index (GMPI) was crushed last month, dropping a nerve-rattling 9.4% in September. As our table below shows, our index of the global market portfolio is down steeply for year-to-date and 12-month readings too.

100108.GIF

That's an extraordinary loss for GMPI, all the more so since the previous three months have witnessed hefty, although not as steep declines in the index. Faith has tumbled in large swaths of the U.S. economy and investing strategies generally this past month, and GMPI didn't escape the pain.

We'll be analyzing why GMPI stumbled so horribly last month in the coming days, provide some historical perspective, and what it means for broad asset-class based strategies generally. For now, we'll let the red ink above speak for itself.

One housekeeping note: the performance numbers for the individual asset classes above are based on indices rather than ETFs and mutual funds, which was the norm previously. That will be the standard going forward, in part because GMPI is based on indices rather than securities products and so it provides a more apples-to-apples comparison.