David Fleer
Bristlecone Value Partners, LLC
12301 Wilshire Blvd., Suite 320
Los Angeles, CA 90025 USA
Work 1-877-806-4141

2013 in Review

January 15th, 2014

The US stock market was among the top performers in 2013 despite persistent investor concerns that the Federal Reserve might reduce its monetary support of the economy. Economic data did improve and interest rates increased from a low of about 1.7% for the 10 year Treasury bond to about 3% at the end of the year. This explains why bond funds struggled during the year with some of them showing small negative returns.

The Barclays US Aggregate bond index, which is dominated by Treasury, mortgage and corporate securities and is the benchmark that we use to track the performance for the ‘Income and Preservation of Capital’ portion of your portfolio, recorded its first negative year of total return since 1999 (- 2%). While that was less than 1994’s loss of 2.9%, it represents just the third annual negative total return for the benchmark since 1976, according to Barclays. Junk bonds and bank loans eked out positive returns thanks to investors’ quest for higher yields.

Europe turned the corner and the Euro rose against the US dollar (by about 4%) defying consensus forecasts. European markets did well but trailed the US market overall. Emerging markets had a difficult year due to a combination of growth concerns and repatriated capital from developed markets in the US and Europe. Some of the worst sectors in 2013 were gold and precious metals. Read the rest of this entry »

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