MARKET-VIEW 4TH QUARTER 2013 – January 2014 Newsletter

After a great year for the equity market in 2013, investors are looking to 2014 and wondering what to expect in the year ahead.  The economy appears to be gaining momentum as we head into 2014 and may soon enter “escape velocity” – meaning our recovery moves into expansion and does not require excess monetary stimulus (no quantitative easing) which could bring the expectations of tighter monetary policy into investors’ minds.  A secular bull market is likely intact but the risk of a 5-10% correction this year is elevated. These gains came in the face of ongoing macro challenges, illustrating again that stocks often like to climb a “wall of worry”.  The past year started with a government crisis and an agreement regarding the fiscal cliff.  Throughout the following months we saw political problems in Europe, an international crisis in Syria, another US government shutdown, a botched rollout of the Affordable Care Act and the word “taper” entering our investment lexicon.  Stocks kept powering higher however, with only brief pauses along the way. This bull market is now the 6th Read on! →