First Quarter 2014 Review | Fee-Only Financial Planners Long Island

First Quarter 2014 Review

The markets struggled during the first quarter but managed to produce rather muted returns, but not without some volatility. The S&P 500 was down over three percent in January before recovering.  Our globally balanced portfolios managed to produce about 1.5% return on average for the quarter.

Stocks did reasonably well in the first quarter with more speculative and smaller company stocks leading the charge. International equities did well, but couldn’t best their domestic brethren. Despite the worries of an increasing interest rate environment fixed income did well and tax-free municipal bonds rallied hard as municipality revenues improved with the strengthening economy. Money market funds once again returned nothing to investors as interest rates are being held low by the Federal Reserve Bank.

Major Market Indexes

Index 1st Quarter 2014 12-Month
Dow Jones Industrial Average -0.15% 15.66%
S&P 500 Index 1.81% 21.86%
MSCI EAFE GR (International Equities) 0.77% 18.06%
Russell 2000 Index(Small-Cap Stocks) 1.12% 24.90%
Barclay’s Aggregate Bond Index 1.84% -0.10%
Barclay’s Municipal Bond Index 3.32% 0.39%
Taxable Money MarketFunds 0.00% 0.02%


Outlook and Strategy

We are still constructive on the equity markets even though we saw more speculative stocks do well this quarter which is a sign the stock market may have gotten ahead of itself for the time being. Regardless, we are investing capital prudently and for the long-term and wouldn’t chance timing a market that can stay irrational for long periods of time. High quality, dividend paying stocks did poorly this quarter on a relative basis, providing good opportunities going forward for us. We continue to favor this area of the market as valuations are reasonable.

We continue to limit exposure to U.S. Government Treasuries as we believe that interest rates remain too low to warrant a sizable investment.  Instead we focus on alternative areas of the fixed income market that will benefit from an improving economy such as short-term high yield bonds and non-agency mortgage back securities; both of which carry less interest rate risk, yet are levered to an improving economic recovery. We still believe cash is an area to avoid, with better investments in alternative fixed income securities mentioned above.

Our overall outlook for the U.S. Economy remains positive.  We are expecting the slow growth to continue as the global economy continues to deleverage and deflationary pressures persist.

On behalf of the entire team, we want to thank you for the confidence you have placed in us by allowing us to guide you and your loved ones. We are delighted to be able to report positive returns this quarter. It has been and continues to be our privilege to serve you and your family’s needs.


Ronald W. Rogé, MS, CFP®

Steven M. Rogé, MBA, CMFC®, AIF®




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