August was a rough month for both investors and the markets. For every encouraging sign about the economy, there seemed to be two discouraging ones. Exchange traded funds (ETFs) bore the brunt of the pain.
It was the Dow Jones Industrial Average’s worst month since 2001, declining 4.3%. The S&P 500 lost 4.7% and the Nasdaq was hardest hit, losing 6.2% in August.
Of most concern to the markets is the fact that unemployment has stayed stagnant, at 9.5%, and the fact that real estate continues to struggle. Tax credits that expired on April 30 are winding down, and it’s becoming clear how much they were needed. On the brighter side, Federal Reserve Chairman Ben Bernanke said that the central bank would take steps to support a recovery if it became clear they were needed.
But it’s a sign of the times: gold ETFs and Treasury bond funds lead the markets this month. Gold ETFs were up about 6% and Treasury yields have been pushed below 3% as investor cash pours in.
To view our complete August ETF Performance report, click here.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.