Over the course of 2013, many investors asked the following questions of their Trust Company advisors:
“Considering all that has happened in 2013, what issues should really concern me?”
“Looking to 2014, what factors might affect me?”
While we feel that a number of 2013 events were important, below is a list of the most impactful factors related to the economy and investments to keep in mind as we enter 2014:
Key Events of 2013
- U.S. Economic Growth – recovery continued with GDP growing by approximately 2%, a trend from which most all investors have benefitted as the U.S. continues to strengthen post-2008
- Fixed-Income Markets – many U.S. bond investors saw negative returns for the first time in decades, and this will likely only continue as the Fed unwinds its easing policy
- Equity Markets – domestic equities significantly outperformed international stocks while Emerging Market (EM) stocks ended the year in negative territory
Notable Areas for 2014
- Investor Behaviors – investors are expected to continue moving toward equities and riskier investment options; EM stocks look most attractive based on current valuations
- Shifting Monetary Policy – keep an eye out for the Fed to tighten monetary policies; however, until unemployment decreases and, therefore, inflation increases, we don’t expect any significant policy changes
- Global Inflation – long-term, U.S. inflation is expected to average between 2.0-3.0% annually, with 2014 GDP growth rising by more than 1% from 2013; Japan is implementing a stimulus package to increase the country’s competitiveness and anticipates continued positive inflation after years of deflation
At The Trust Company, we feel it’s important to monitor these key economic events and measurements around the world to understand the full portrait of financial markets. We hope that you will allow us to discuss these factors and their potential influence on your trust and retirement needs.
Useful links:
A Look Back Before Looking Ahead
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