May was a down month.  Global stock  market indexes were down–from 1.1% (the S&P 500 index and the Russell 1000 Index–domestic large cap stocks) to 3.2% (EEM Index–emerging markets).

Global REIT indexes (commercial real estate) also were down, as was the commodities index.

Domestic and international bond indexes were mixed, with the Barclays Capital U.S. Aggregate Bond Index up 1.3% and the JP Morgan GBI Global Bond Index down 1.2%.

However, when we evaluate the first five months of 2011 as a whole, we see that all indexes are positive for 2011 through May 31^st, with the domestic stock indexes up around 6%; the international stock indexes up around 4%; and the domestic and international bond indexes up around 4%.

All Starmont Client accounts are positive for 2011 through May 31st—with the amount dependent on how their assets are allocated among the various asset groups.  So far in 2011 the higher the allocation to equities, the better the portfolio performance.

The first six trading days in June have continued the negative trend from May.  Some analysts have described what is happening as a “soft patch” in the economy; others have said that the U.S. economy has “hit a brick wall.”  Some economists are revising their estimate of 2011 GDP in the United States to 2.0-2.5% from previous estimates of 3.0-3.5%GDP of 2% is not enough to create jobs and grow the economy at a sustainable rate.

Starmont has received a number of questions about the situation, and we thought that we would share those questions and our responses with you.

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