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Lindsey Report – April 2014


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Equity values ended the first quarter little changed for the year with the S&P 500 up a little over 1%.  The good news is that, thus far, equities have maintained their gains of 2013 and have gone on to set some new highs.  Please refer to your statements for valuations.

Interestingly, bonds actually matched the performance of equities in the first quarter, gaining approximately 1.8%, as measured by the Barclays Aggregate Bond Index (LPL Financial Research).  I found this surprising, given the Federal Reserve has continued their tapering, which started last summer.  Many expected this would cause interest rates to rise precipitously and subsequently valuations to fall.

However, I am most pleased to see the first quarter end because this winter is finally OVER!  While northern states are accustomed to dealing with snow, by all accounts this winter was especially challenging.  Not that I would typically attribute a “speed bump” in the economy with bad weather, it would appear that the weather did slow the economy this winter.

The bigger question is whether or not the economy will regain traction.  As we all know, one area that needs improvement is the labor market.  Fortunately, the Labor Department reported that March payrolls increased by a solid 192,000; moreover, private payrolls have now exceeded their December 2007 levels.  In a sign that more hiring could be on the way, employers advertised 4.2 mil job openings: the highest number of opening since January 2008 (USA Today).

Realizing that predictions rarely come true, I still liked this one.  On 4/4, the IMF (International Monetary Fund) predicted that the global recovery would strengthen in 2014 and 15, with the U.S. being one of the key drivers.  They predict “above-trend” growth of 2.8% in the U.S.

I’m sure that I have Spring Fever, but I’m hoping my optimism is well-founded, too!

 

 

The opinions voiced are for informational purposes only and are not intended to provide specific advice to any individual.  To determine which investments are appropriate for you, consult myself prior to investing. Past performance is no guarantee of future results.  Indices are unmanaged and cannot be invested into directly.  The economic forecasts set forth in this commentary may not develop as predicted and there can be no guarantees that strategies promoted will be successful.  The Standard and 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.  Barclays Aggregate Bond Index is an unmanaged market capitalization weighted index of most intermediate term U.S. investment-grade, fixed rate, non-convertible and taxable bond market securities, including government agency, corporate, mortgage-backed and some foreign bonds.

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