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Monthly Commentary

April 2014
  • The first quarter delivered good news and bad, but nothing that would derail equity markets from their pursuit of new highs.

  • Though bonds outperformed equities in the quarter, positive performance was broad-based.

  • Resurgence in the manufacturing sector — driven in part by the monumental gas boom — is finding its way into corporate profits.

  • The more acute issues in the emerging markets have eased, fueling a V-shaped comeback by their equity markets.

March 2014
  • While recent equity pullbacks have provided under-exposed investors with attractive opportunities to re-enter the market, many remained spooked by memories of 2008.

  • Risk has remained low in a virtuous cycle where good news is accepted as good news and bad news is quickly discounted.

  • Many emerging economies have struggled this year, but they are generally better positioned to withstand a currency assault than they were in 1997.

  • A plan that effectively balances building wealth and controlling risk better positions investors to pursue their goals in all seasons.

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February 2014
  • The Fed is handing the baton to back to the markets for pricing risk, sending volatility higher on its path back to normal.
  • Emerging markets health is vital to global growth, as they have doubled their contribution to global GDP over the past decade to nearly 40%.
  • S&P 500 corporations derive half of their revenue from overseas; global consumerism and manufacturing provide ongoing support.
  • Broad global diversification across equity and fixed income markets is the best way to protect against volatility.

January 2014
  • While the U.S. market was dominant in 2013, broad global equity diversification contributed to positive investment returns.
  • Surging equity markets were an example of “upside risk” that hit some investors hard in 2013.
  • Effective diversification should be meaningfully global within equity and fixed income, distributed broadly across asset classes and rebalanced on a periodic basis.
  • If you invest like everyone else, you likely will experience the same sub-par returns that everyone else does.

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