March 9, 2014 marks the five-year anniversary of the market bottom of the Great Recession. For those investors who held on and followed our 10-year rule and were able to wait out the bear market, the S&P is up 209%. The Dow Jones Industrial average has a total return of 187%, while the NASDAQ is up 265%. The United States has outpaced much of the world, with emerging markets up only 127% over the same five-year period.
At the beginning of 2014, we talked about our predictions for the year, noting we expected 10-12% in earnings growth. We have seen fourth quarter 2013 earnings grow at 8.46%, which may give some hope of hitting that target. However, the second gross domestic product estimate for 2013’s fourth quarter came in at 2.4%, while the initial was 3.2%. Now. we see geopolitical unrest in Ukraine. How do any of these events impact 2014 forecasts?
The 10-year Treasury yield has fallen from 3.02% at year-end to 2.73%, currently. We expected it to increase 3.5%. Inflation has stayed very tame, which we expected. We still expect the S&P 500 to be up 10% to 15% for 2014. St Louis Fed president James Bullard expects 2014 GDP growth to exceed that of 2013. The Fed sees the economy remaining strong enough to continue winding down the stimulus. Additionally, consumer debt is at its lowest debt service level on record. We expect to see gains in consumer spending, as housing continues to recover and those who were underwater are able to refinance.
At Henssler Financial we believe you should Live Ready, and that includes understanding your long-term investment plan. If you have questions regarding your plan, the experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
