2014 Second Quarter Market Review - Sloy, Dahl & Holst, Inc.
2014 Review and Expectations
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PORTLAND, OR, July 29, 2014 /24-7PressRelease/ -- In 2009 we expressed to all of our clients that we were being presented with one of the best buying opportunities we had seen in the last 25 years. In 2010 and especially 2011, despite continued and extreme volatility at times, we remained consistent in that message and felt the next three to four years would be one of the greatest periods in stock market history. As the Dow crossed 17,000 for the first time last week, and has moved approximately 10,000 points higher since the 2009 market lows, we're happy to know our message and consistency has benefited our clients. That's what's most important to Sloy, Dahl & Holst.
Where do we go from here and what's driving the markets? In 2008 we were losing approximately 300,000 jobs per month and the stock market was falling just as quickly. Five years later, in 2013, we created an average of 208,000 jobs per month totaling 2.5 million jobs for the year. In June of 2014, our economy created 288,000 jobs. Obviously, lower unemployment and continued job growth bodes well for the U.S. economy and stock market.
Additionally, in the month of June we had the most auto sales since 2006 (pre-financial crisis). Also, factory orders, home sales, home prices, consumer confidence and manufacturing have all shown significant improvement. With the U.S. economy gaining strength we will be ordering more goods and services from Europe and around the world which will also help to improve the global economy.
We recently took a position in the Emerging Markets, which have been mostly out of favor more than three years, and continue to like Technology, Financial Services, Europe and U.S. Growth stocks, primarily within Small and Mid-Cap companies. Listed below are year-to-date returns of five major indexes:
BarCap US Agg Bond 3.93%
S&P 500 7.14%
Russell 2000 3.19%
MSCI EAFE (Europe) 4.78%
MSCI EM (Emerging Markets) 6.14%
What do we see for the second half of 2014?
We continue to believe that interest rates will head higher during the course of the year. Janet Yellan, Chair of the Federal Reserve recently stated, "Until we see wage inflation, the Federal Reserve will continue their accommodating ways." We believe she is a friend of equities and is one of the reasons why we continue to remain bullish. Overall, we believe our economy will continue to improve at a moderate pace over the second half of 2014, and that equities should remain favored over bonds, gold and other defensive plays for quite some time.
Please keep in mind; the stock market does not always go straight up like it did in 2013. We've seen an amazing run these last six years and believe the markets will continue to experience reasonable gains for the foreseeable future. However, unlike 2013, we will most likely experience some bumps in the road along the way. What's most important is to be mindful of your time horizon and risk tolerance. If you have time to handle the swings of the markets, as they will come, we believe an overweight to equities continues to be the most appropriate approach.
Enjoy your summer, and thank you for your continued support.
Sloy, Dahl & Holst, Inc. is a registered, full-service financial advisory firm dedicated to our clients' financial achievement. As a boutique investment house, we tailor every investment portfolio we manage to meet each client's specific goals.
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