Thursday, May 31, 2012

June 2012 Stock Market Predictions

For the second month in a row, I got all four of my predictions right, meaning I am now 9-for-12 on the year and approaching superstar market guru territory (no, not really). To recap:

Vanguard 500 Index Fund Investor Shares (VFINX). May 2012 Starting Price: $128.95. Prediction: Lower.  May 2012 Ending / June 2012 Starting Price (no dividends): $121.19. Result: CORRECT.

Vanguard Small-Cap Index Fund Investor Shares (NAESX).  May 2012 Starting Price: $37.33 . Prediction: Lower.  May 2012 Ending / June 2012 Starting  Price (no dividends): $34.80. Result: CORRECT.

Vanguard Developed Markets Index Fund Investor Shares (VDMIX).  May 2012 Starting Price: $9.26 . Prediction: Lower.  May 2012 Ending/ June  2012 Starting  Price (no dividends): $8.22. Result: CORRECT.

Vanguard Emerging Markets Stock Index Fund Investor Shares (VEIEX).  May 2012 Starting Price  $26.99 . Prediction: Lower. May  2012 Ending / June  2012 Starting  Price (no dividends): $24.00. Result: CORRECT.

All stock indices got slammed this month with foreign stocks getting the worst of it. It's tempting to forecast a bounce in June, especially for EAFE stocks (Vanguard fund VDMIX) which are quite attractive at these valuations, but I will stick with the gloom and doom for another month at least. I predict all four of the above funds will finish June lower than they started.

Again, if you are confused why I am making one-month market predictions after preaching how it's counterproductive to try to time short-term market moves, consider this to be an experiment conducted by the devil's advocate.

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