Despite a mild retreat last week, stocks continue to outperform bonds. Interest rates didn’t move, but remain extremely low. That’s not to say interest rates couldn’t drop, producing capital gains. But it’s not a scenario that I would bet on. Stocks haven’t been great lately, but here we are halfway through September and there are no signs of impending doom. A balanced portfolio should presently be overweight stocks.
Looking more broadly, Chinese stocks (FXI) continue to outperform. Close behind, in second place, are US small cap stocks (IWM). Not surprisingly, the emerging markets ETF (XEM), which contains some Chinese exposure, is also poised to perform well.
I seem to have neglected to mention when I sold Aaple (AAPL) shares a week or two ago. After the last week, where it lost 6%, I’m certainly glad I did. I only dabble in US stocks, but I owned UNH since then. It didn’t really go anywhere, and now I plan to sell it and buy either GILD, MS or SBUX.