Stock indexes posted strong gains in July. US Large cap and International stocks were up over 3% and US Small Cap and Emerging Market stocks were up more than 6% during the month. Primarily led by the Fed’s pause on interest rates in June, and the continued trickle of positive data on the economy. 

In the first half of the year, performance of the S&P 500, and arguably the market at large, had been dominated by large tech stocks.
Large Growth stocks have been on a white hot tear this year returning over 33% in the first 6 months.This started to turn over a bit in July.The S&P 500 Equally-Weighted Index returned slightly more than the traditional S&P 500 Index in July (3.5% vs 3.2%). This performance shift is a good thing for diversified portfolios because it means that a broader range of stocks performed well, as opposed to a small few.  
 
The “so what” of all this. How does this apply to me?
Not focused on growth or large growth. This, like everything else, goes through cycles. It has been in favor in recent history because of suppressed interest rates. Large Growth was -30%+ in 2022… because interest rates went up, fast.
 
Diversification:
A portfolio of 60% SP 500 & 40% Barclays US Aggregate Bond indexes is +13% year to date. According to JPM, a broadly diversified allocation of about 8 different asset classes is +10.7% YTD as of 7/31.The goal of diversification is not keeping up with a specific equity index.If you’re retired or in the later innings of your career, you’re going to have exposure to bonds, for income and risk control. Bonds are up barley 2% this year because they’ve been going through a rate hiking cycle and inflation (a bond’s worst enemy) was generationally high last year.
 
So,Knowing you have a diversified portfolio…
When you hear, “The NASDAQ is up for 13 straight days!” know they’re not talking about you.  When you hear, “Equities are favored to bonds!”, just think to yourself “well I use bond to control risk in my portfolio, and they’re now paying me more than they have in 20 years.” And when you hear talking heads explaining why pockets of the market are ripe for bursts of performance, just remember that market timing has been all but proven impossible, and pursuing it is a fools errand.
 
Thank you for your continued trust and partnership.