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2012 - Sprinting Out of the Gate

Most investors are probably aware of how well the S&P 500 has done so far this year. According to Morningstar we've seen the S&P up 7.11% through Friday, February 3! But as good as that is, it comes on the heels of a very good fourth quarter of 2011. Since 9/30/11, the S&P is up 15.32%, and other sub-asset classes have fared even better:

YTD 2012
Since 9/30/11
DFA US Large Company
DFA US Small Cap Value
DFA International Core Equity
DFA Emerging Markets Value

(Data provided by Morningstar.com for the periods ending February 3, 2012. These funds may or may not be owned by Springboard Asset investors and are used as examples only to illustrate the relative performance of various sub-asset classes.) Of course, we have no expectation that performance of this magnitude will continue, but it's illustrative of how the market cycled almost exactly at the end of the third quarter of last year. Prior to 9/30, small cap, value and international stocks had performed quite poorly. But at that point, the markets turned almost on a dime and rallied back, favoring the areas that had underperformed in the prior 9 months. Last week, we saw some numbers that continued to give optimism to investors, including a surprising increase in employment and an equally shocking unemployment rate of 8.3%, a number not seen in nearly three years.  Remember that the stock market is an leading economic indicator, and that we'll see a market rebound before an official upturn in the economic cycle.  Let's all cross our fingers and hope that this is the start of that upswing...