Market Commentary & Analysis

Quarterly Market Overview

U.S. large cap stocks and investment grade bonds turned in positive results during the third quarter of 2014—unfortunately for diversified investors and those accustomed to steady and widespread gains, not much else across the global investing landscape did. Heading into the final quarter of the year, small cap stocks, international equities, and commodities are now each underwater on a year-to-date basis.

Market Pulse Report

Stocks lost ground in September, as they frequently do—the month is historically the poorest in terms of performance. Non-U.S. equities were hit particularly hard, especially in dollar terms, with the MSCI EAFE index of international stocks falling 3.8%, nearly triple the domestic S&P 500's 1.4% monthly loss. The performance disparity is even larger over the past year, as the EAFE's 4.7% gain is lagging meaningfully to the S&P 500's 19.7% return (including dividends).

Market Pulse Report

There’s never a bad time for reconsidering risks inherent in the capital markets—investing is, after all, different from saving for a reason. Perhaps there is no better occasion than with the S&P 500 trading at record highs and having recently pierced the 2,000 level.

Market Pulse Report

The dog days of summer are leaving investors hot under the collar lately, with volatility and fear creeping back into the markets after a very long vacation. July ended poorly for stocks (the DJIA posted its worst one-day drop since February), snapping a string of five consecutive monthly gains. Some may be fretting over the losses, but despite a few gut-wrenching days, the decline is not yet enough to qualify for an official correction (as of August 7, the S&P 500 is 4% off its all-time high).

Quarterly Market Overview

2014 is turning out to be another fine vintage for global capital markets. At the year's midpoint, asset classes across-the-board are posting strong returns. U.S. stock markets are bouncing along near record highs, emerging markets have seen renewed optimism, real estate markets are humming, and commodities are still showing signs of life. Even bonds have gotten into the act—surprising to some, as the consensus earlier in the year was for yields to drift higher in the face of the Federal Reserve scaling back stimulus.

Market Pulse Report

It has been five years since the recession ended, and the economic recovery is still trying to find its footing. The first quarter’s revised GDP report was shockingly dismal, yet it only punctuates what, by many measures, has been one of the weakest recoveries in modern history. Since the current expansion began in 2009, the economy, restrained by high unemployment and stagnant incomes, is growing at a sluggish rate of just about 2%. This is well below the long-term average, as well as that of other recoveries.

Market Pulse Report

Another month, another record high for U.S. large cap stocks. One could get used to this sort of thing, as the bull market that began five years ago continues in full swing with nary a hiccup. However, some worry that complacency might be setting in. Is a lack of volatility something to be worried about?

Market Pulse Report

It appears spring has sprung—at least for the economy. After a chilly start to the year (both in the economy and stock markets), recent economic data are turning mostly positive. Many believe the dismal first quarter GDP report, which showed U.S. growth stalling, can be largely attributed to a harsh winter, and now that the weather is warming, the economy is poised to resume its recovery. An increase in manufacturing activity, employment gains, and strengthening consumer confidence and spending are among the indicators that point to a better second half of the year.

Quarterly Market Overview

U.S. stock markets finished the first quarter of 2014 near record highs. However, returns that on the surface appear tranquil, masked trading that was actually a bit choppy. Investors contemplated a variety of issues throughout the quarter, including the Federal Reserve's unwind of stimulus under new chief Janet Yellen, the economic implications of harsh winter weather in the U.S., Russia's actions in Ukraine, and China's economic slowdown. All in all, capital markets seemed to have, by the end of the quarter, digested most matters without repercussions.

Market Pulse Report

Make no mistake, we are long-term investors. In our opinion, developing and adhering to a strategic allocation policy are key determinants to achieving investment goals. That being said, there are environments when a dynamic approach to asset allocation, rather than relying solely on static models, gains added importance. We believe that we are in just such an environment, characterized by lower-than-typical expected returns (as a result of rising equity valuations and rock-bottom bond yields) and potentially heightened market sensitivity to macro events.

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