4th Quarter 2014
Markets Hit Highs In 2014
Calendar year 2014 turned out to be a positive year for the markets with all indices making a strong showing. The year had its dips, with strong drops in January of 3.5% and in both July and September of 1.4% each. As December went on, the market staged a strong rally, until it ran out of steam. In the last days of December 2014, the market began to falter. By then, the markets had been in strong upturn for the year, and since March 9, 2009 up 244%. The market began to look tired, as well it might after 70 months of this bull market.
3rd Quarter 2014
Client Newsletter – Quarter Ending September 30, 2014
Last month in our Daily Journal of Commerce column, we warned that September and October could be volatile months, months with a downturn. There were many reasons for this forecast. History was one, with both September and October demonstrating a tendency to be volatile and lower. Further, the market has had an over five year run up and was due for a correction. Also, there were and are many headline events to worry about: problems in Europe, specifically Ukraine; a slowing Chinese economy, with attendant pullback in commodity prices. Then there is Ebola which has taken center stage, and ISIS. These problems persisted and in some cases grew worse. September turned out to be a volatile and down
month.
2nd Quarter 2014
Client Newsletter – Quarter Ending June 30, 2014
The second quarter of 2014 saw a return to market increases after a rough first quarter of the year. In fact, the government revised the first quarter GDP to a minus 2.9% from the positive 1% previously reported. The start of Obamacare and severe winter weather were the reasons most cited for the negative growth. Additionally, the Russian acquisition of Crimea and revolutions in the Middle East were events unsettling to the markets.
1st Quarter 2014
In 2013, the market had one of its best years ever. The broad market, as represented by the S&P 500 index, was up 29.6%. Typically, after a strong year, the market will continue on its course. After a nearly unbroken upward climb since March 6, 2009, one of the longest bull markets in history, the market was due for a pause, maybe even a correction (defined as a 10% drop). This year the market continued to reach all-time highs and then took a breather. The market appears tired, but its current pause so far appears in character and no cause to panic.
4th Quarter 2013
The market had a remarkable year last year, gaining 32.39% in the S&P 500 index. To put it in perspective, the S&P 500 has gained over 20% in a calendar year 21 times since 1945 that is 21 times out of 68 years, or almost 31 % of the time. This amazing statistic is reason enough for remaining fully invested in the market. Even when times are grim, and the market is off, one should remain invested. In the same 68 year period, the market has gained over 30% just six times. Still this almost 10% records of gains is also a strong argument for staying invested.
3rd Quarter 2013
Client Newsletter -– Quarter Ending September 30, 2013
The third quarter of 2013 saw a continuation of the robust market that this year has brought. In spite of worries, mostly over government problems, unemployment, and fears over Federal Reserve policy, the markets have risen to record or near record territory. Both the S&P and the Russell 200 are at all-time highs. The NASDAQ is at a 13 year high (but still 29% off its all-time highs). That the markets have been able to climb this wall of worry is a good sign, not only because returns are good, but it is a good situation because worries have kept the markets from being overly exuberant. I have detailed the stresses in the markets in previous columns and letters, so it is not necessary to review them again, but it is encouraging that the markets have surmounted these worries.