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October 2, 2014

Performance Review by Major Asset Class - Sept. 2014

By James Picerno of The Capital Speculator
September was a complete rout. All the major asset classes suffered losses last month—the first calendar month of across-the-board red ink since June 2013.
At the top of the casualty list: emerging-market stocks (MSCI EM), which tumbled 7.4% in September. As for the notion of a “winner,” the definition was downsized last month. US bonds (Barclays Aggregate) delivered the smallest loss in September among the major asset classes: a relatively slight 0.7% decline. With no place to hide in September, the zero return on cash suddenly looks good.
Meantime, the Global Market Index (an unmanaged benchmark that holds all the major asset classes in market-value weights) declined 2.8% for the month—the biggest monthly setback in more than two years. On a year-to-date basis, GMI is still ahead by 3.1%. In fact, most of the major asset classes are still able to claim positive if modest returns so far this year. But the fourth quarter begins under a dark cloud and so the challenge at the moment is simply keeping one’s head above water between now and the end of the year.
If there’s a silver lining here, it’s lined with greenbacks. The US dollar has rallied sharply in recent weeks, posting a 3.9% rise in September, based on the US Dollar Index. That’s the only gain for last month’s performance ledger. The search for a safe haven is back in vogue.

About the Author - James Picerno is a veteran financial journalist since the early 1990s at Bloomberg, Dow Jones, etc. before becoming an independent writer/analyst/consultant in 2008.  James is also the author of Dynamic Asset Allocation (Bloomberg Financial, 2010) and he writes at The Capital Speculator(EconMatters author archive here)

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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Item Reviewed: Performance Review by Major Asset Class - Sept. 2014 Rating: 5 Reviewed By: Econ Matters