(888) 234-7982

“Going down this checklist, it’s evident that the factors that have been most positive over the past couple of years are diminishing or highly uncertain. And the rest, although they may be beneficial in the very short run, don’t hold much promise for next year as a whole.”

“As you go into (the year), walk softly and carry a big cash balance.”

Wait, a TAAG blog about the future of the market?

Not exactly.

The primary purpose of this e-mail is to wish our clients and other readers a very safe and Happy New Year and all the best for a successful and prosperous 2014.

It’s also a quick reminder to treat all the articles and reports on where markets, interest rates, the economy, etc. are headed in the new year with a grain of salt.  Some recent evidence follows.

The first quote above is from a TIME business column in late 2012 about the outlook for the 2013 stock market.  The second, a similar forecast of potential doom based on the Presidential cycle theory from a U.S. News report on New Year’s Day 2013.

With a simple search of anything related to 2013 stock market predictions, there’s no shortage of similar claims.  Who could blame the prognosticators?  Stocks had performed well in 2012.  We were on the edge of the fiscal cliff and, while many agreed we’d climbed back to some normal market level from the 2008/2009 drop, fears about an overly rich market were growing fast.

So, what happened?  Those who stuck to their guns, rebalanced when appropriate and remained invested were rewarded handsomely.  As of this writing, small, U.S. companies lead the way up just a whisper under 45% for 2013.  Their small, value counterparts are close behind, up nearly 42%.  Large, U.S. companies are up between 30-40% and international companies in developed nations range from 20-30%.  Real Estate is largely flat and the only down asset class for the year are the emerging markets, always a volatile part of the portfolio.

The point isn’t to tout big returns, but to serve as a reminder to embrace simplicity, keep the focus on those things we can control, stick to a disciplined philosophy, keep costs low and be tax efficient.

TAAG’s offices will be closed on Tuesday, December 31 and Wednesday, January 1 so that we can be home to celebrate and reflect on the year that was and the year to come with our families.  We hope all is well with all of you and that you have the opportunity to do the same.

Happy New Year!