First Half of 2014
As we enter 2014, it is wise to reflect on the stellar year for the equities in the US and most markets abroad. There was a long list of events and topics that threatened the bull market but the stock market managed to "climb the wall of worry." While topics like the government shutdown, sequester, the Affordable Care Act rollout, European contraction, slowing China growth and modest U.S. GDP growth could have given investors pause, there were also many structural positives. Some of these include: much lower energy prices (secular in our opinion), revival of manufacturing in the U.S., "on shoring", improving balance sheets for individuals and corporations, lower unemployment and a shrinking debt to GDP ratio.
I mentioned in my last Ken’s Korner that I expected "growth" to outperform "value" in the intermediate term due to its relative value and the expectation that growth would pick up in the latter part of 2013 and into 2014. So far so good. I am still finding attractive growth stocks and also see value in certain European regions, some international fixed income and municipal bonds.
After such a strong stock market in 2013, I feel this year will be a much more difficult market to navigate and stock selection will be key. In fixed income we are extremely cautious overall, mainly on the fear of rising interest rates but continue to see a few attractive areas of the fixed income market. The Raymond James Best Picks handily outperformed the S&P 500 again in 2013 and our equity-linked note remains a unique equity holding in most of our portfolios.
My team and I continue to use our new "Goal Planning & Monitoring" program for many client reviews and feedback has been extremely positive. We greatly appreciate and value our client relationships. As always, thank you for your continued trust and confidence.
Best regards,
Ken
The S&P 500 is an unmanaged index of 500 widely held stocks and is generally considered representative of the U.S. stock market. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns.
Past performance does not guarantee future results.
