Did you stay the course in 2014? As so often happens, the financial markets defied expectations and expert prognostications. When the market plunged in October, those who hung on were rewarded at year-end. Proving once that the best antidote for financial fear is a sound strategy, disciplined approach, and broad diversification. And 2015 is likely to be no different

U.S. stocks continued their positive trend in November as U.S. 3^rd – quarter growth was revised up, to 3.9%. The news sent returns on the S&P 500 2.69% higher, bringing YTD returns on the index to a healthy 13.98%.Volatility continued to decline from its mid-October peak. Commodity prices are headed for their fourth straight year of losses. Both medium and long-term treasury yields declined. Many analysts find the divergence puzzling, 

In spite of a mid-month plunge in global stock prices, upbeat economic and corporate news lifted the S&P 500 Index to close October at an all-time high, notably retuning 2.44% for the period. The sell-off, the worst in two-years, resulted from concerns over global growth, falling oil prices and the stronger US dollar. Though volatility spiked during the period, in the end the S&P 500 VIX short-term futures index declined 2%. The S&P MidCap 400 and the S&P SmallCap 600 both delivered strong performances and gained 4% and 7% respectively.

As recently as last year, and for the first time in 80 years, federal regulators lifted a ban on advertising allowing hedge funds and private equity buyout firms to now promote their products to the general public. This piece of legislation fundamentally changed the way in which private placement issuers raise money and affords them an opportunity to collect even more in management fees. For decades the private offering giants persuaded institutions and university endowments to entrust them with investing billions of their dollars while promising diversification and better returns than the general market.

Despite a mid-month surge, as September drew to a close, the S&P 500 erased all of its earlier gains ending down 1.4%. The S&P 500 VIX Short-Term Futures index gained 11%. The S&P Mid Cap 400 and the S&P SmallCap 600 both declined by a significantly wider margin (-5%).

 

The S&P 500 index returned 4.00% in August and ended the month eclipsing the 2000 point milestone for the first time. Strong August gains brought YTD returns on the index to 9.89%. August was also a good month for small cap stocks. The S&P Small Cap 600, which lost 5.5% in July, recovered 4.3% in August landing the small cap index back into positive territory YTD.

The stock market ended July with the sharpest decline in the Standard and Poor’s 500 Index since April. After hitting an all-time high during the month, the S&P 500 ended down 1.38%. Not surprisingly, the S&P 500 Volatility Index surged 13%. On a positive note YTD returns on the S&P 500 index remain a healthy 5.66%.

Equity markets posted positive performance for the quarter, led by emerging markets. This was the first quarterly period in which emerging markets outperformed developed markets since the third quarter of 2012. REITs both in the US and in developed non-US markets outperformed equities. Large cap indices outperformed small cap indices in the developed and emerging markets, including the US. In general, value outperformed growth indices, though performance was mixed within size ranges and regions.

To our surprise and delight we received this news late last week: Congratulations! Cardiff Park Advisors has been named to the inaugural 2014 Financial Times 300 Top Registered Investment Advisers. In a field of outstanding financial professionals, the FT 300 should be considered a list of truly exceptional advisor firms.

Click here for the full report. 

Following a mid-month slump, the S&P 500 finished May with a 2.35% return. Across the Atlantic, the MSCI European Equity Index returned 0.89%. As far as the MSCI Pacific Rim Index, it returned 3.22%.  Momentum returned to the developing markets with the MSCI Emerging Market Equity Index jumping a healthy 3.49%. This was a good month for global equity investors.