June was another difficult month for the stock market as a drop of -5.2% for Large Cap Stocks resulted in the SP 500 falling -11.4% in the second quarter this year. Small Cap Stocks had an even worse month, losing -7.8% in June, though they ‘ONLY’ lost -9.9% for the quarter. The pressure from the European financial crisis has started to subside, helping International Stocks fare considerably better this month, losing only -1.3%, but that still left them with a -12.5% drop for the quarter.

A ‘flight to quality’ proved to be the theme this quarter with high quality government and corporate bonds adding 3.5% for the quarter. TIPS were up slightly more, returning 3.8% over the last three months. REITs were not hurt as bad as other equities, dropping only -5.2% this quarter, lowering their gain for the first half of 2010 to a surprising 5.7%, even better than the 5.3% return for bonds so far this year.

Continue reading the Insightful Investing Newsletter July 2010 …