Summer, Summer, Summertime!

iStock_000015010937XSmall - tidesI know it is summer officially when our CPA sends out his summer schedule which says he is closed on Fridays, I am not as behind as many school buses going to train our dogs at 6:30am, the Major League Baseball All-Star game is around the corner, and clients are saying we will be at the beach for this coming week. All seem to be good things and our observations have been over the last 20 years that when it comes to summer months, not only do people kick back, get outside and go do some fun activities, but the stock market seems to relax and move sideways.

As we go into this summer, we do not think that this summer will be any different. Now in today’s world you always have to add the caveat if some unforeseen “BIG GEOPOLICITICAL EVENT” occurs, well that will change things. But, with that removed, we see this 2014 summer stock market focusing on vacation time, like many of us.

That is not to say the market will not move up or down. It will, however we believe it will within a range. That range is being controlled by continued low interest rate guidance from the Federal Reserve, Europe’s continued progress in working its way out of recession, slowly improving economic numbers, and anticipation of a reasonable good second quarter numbers.

Over the last several weeks, Gib and I have been with or talked to each of the outside sources that we consult with when it comes to our forming our investment decisions. Each has been consistent with some small variations on this market theme we believe will unfold in the second half of 2014. The themes are: we believe GDP will be up for the year 2%-3%, we believe the stock market as reflected by the S&P 500 will achieve low double digit to high single digit returns, and we believe this year the performance will be a back end loaded year.

With this in mind, our continued review of clients’ portfolios is serving everyone well in that it is helping us all think though the issues of performance and risk tolerance.

We continue to be weighted in large capitalized dividend paying positions and credit sensitive bond positions.

We have added weighting in energy and international value.

But, as I said at the beginning, it is our belief that this summer the market will in all likelihood trade in a range so let’s use this time review your positions and then let’s all go to the beach or someplace fun.

Have a good and safe summer and know we will continue to monitor the markets and if needed share with you changes that we believe would influence your planning.


• The opinions voiced in this material are for general information only and are not intended to prove specific advice or recommendations for any individual. To determine which investments(s) may be appropriate for you, consult your financial advisor prior to investing. • The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful. • Stock and mutual fund investing involves risk including loss of principal. • Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values and yields will decline as interest rates rise and bonds are subject to availability and change in price. • The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. • International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. • All indicies are unmanaged and may not be invested into directly. • The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. •Investing in a specific sector involves additional risk and will be subject to greater volatility than investing more broadly.