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Weekly Economic And Performance Summary: Multi Asset Investment Strategies 03-25-2012

Top Stories Last Week

  • Equity markets were down

Global equity markets closed the week down as Chinese economy showed signs of slowdown, and disappointed European manufacturing activities and mixed US housing data captured the headline. The S&P 500 Index was down by 0.5%, posting its worst weekly performance of the year. MSCI EAFE index fell by 1.3% and MSCI Emerging Market index dropped by 2.6% for the week.

  • US housing markets - a mixed picture

The data released last week painted a mixed picture of US housing markets. The National Association of Home Builders reported that housing activities and outlook were a little softer than expected. The builders broke ground on 698K new homes and acquired 717K building permits, an increase of 27K from last month. However, the existing home sales dropped by 0.9% in February. New homes sales was 313K, which was lower than January. Although the warm weather and improving job market helped the housing markets, there is still a long way from a significant housing recovery.

  • Eurozone manufacturing activities were disappointed

Against the economists' consensus, the manufacturing activities in Eurozone worsened in March. The PMI manufacturing index declined to 47.7. The hope of a quick recovery from the debt crisis is premature.

  • China slowed down further

The HSBC Chinese Manufacturing PMI in March declined to 48.1 from 49.6 a month ago, adding to the sign of further slowdown in the Chinese economy.

  • Apple announced dividend for the first time in 17 years

Apple said it would pay $45 billion of its vast cash pile in dividend to shareholders over next three years, though the dividend yield was estimated to be 1.8%. The first dividend since 1995 signaled the change of policy from the Steve Job's era.

Top Stories to Watch This Week

There will be no major economic data to be released this week. Most of them are second-tier data, though we may see some market trading activities as result of quarter-end window dressing.

  • US consumer confidence

The US consumer confidence released by the Conference Board captures the consumer optimism about the economy. It is expected to be 70.5, a slight drop from last month.

  • Japanese industrial production

The industrial production measures the outputs of the Japanese factories and mines. It is a useful gauge on the health of Japanese economy. It is expected to rise by 1.4% in February.

  • German IFO business confidence survey

The German IFO business sentiment index released by the CESifo Group is closely watched as an early indicator of current business conditions in Germany. It is expected to remained at 109.6. Any improvement will be seen as positive development in the European's largest economy.

Weekly Performance Summary

All the portfolios declined slightly as results of negative performance of equity and other risk assets during the week.

Table 1: ETF Performance

Asset Class Return Ticker Asset Class Last Week Return MTD Return YTD Return
Equities          
  SPY US Large Cap -0.5% 2.4% 11.8%
  IWM US Small Cap -0.1% 2.3% 12.5%
  EFA Developed Market Equity -1.3% 0.2% 10.6%
  VWO Emerging Market Equity -2.6% -3.0% 13.3%
Dividend Assets          
  IYR US REIT -0.7% 2.7% 8.8%
  AMJ US Energy Master Trust -0.2% -2.8% 2.9%
Commodities          
  GLD Gold 0.1% -1.7% 6.3%
  GSG Commodity -0.9% -0.6% 8.2%
Bonds          
  HYG US High Yield 0.0% -1.2% 2.4%
  AGG US Bond 0.4% -0.7% 0.0%
  TIP US Treasury Inflation Indexed Bond 0.3% -0.6% 1.0%
  IEF US Treasury Bond 0.4% -1.8% -2.0%
  TLT US Long Term Treasury Bond 1.6% -3.4% -6.2%
  SHV US Short Term Bond 0.0% -0.1% -0.2%

Table 2: Portfolio Performance

Portfolio Solutions WTD MTD
(1 day delay)
YTD
(1 day delay)
1-YR
(as of 12/11)
5-YR
(as of 12/11)
10-YR
(as of 12/11)
Aggressive -0.7% 0.0% 8.3% 12.4% 16.4% 16.1%
Moderate -0.5% -0.2% 6.6% 12.4% 14.8% 14.4%
Conservative -0.3% -0.4% 4.7% 12.5% 13.7% 12.8%
Defensive 0.0% -0.7% 2.8% 13.2% 12.5% 11.1%
S&P 500 Index -0.5% 2.4% 11.8% 2.0% -0.3% 2.9%
Barclays Bond Index 0.4% -0.7% 0.0% 10.3% 6.9% 5.8%
CPI Inflation       3.2% 2.3% 2.5%

For more information about the multi-asset investment strategies, please visit allseasoninvesting.com.

About ALL SEASON INVESTING: All Seasin Investing (NYSE:ASI) is an investment blog, created in December 2011 to offer investors insights and researches on how to implement a dynamic multi asset allocation strategy with the low-cost index funds or ETFs to achieve consistent returns while limiting downside risks through all stages of a market cycle.

Disclosure: I am long SPY, IWM, EFA, VWO, IYR, AMJ, GLD, GSG, HYG, JNK, AGG, TIP, IEF, TLT, VNQ.