Mid-Year Summary

Despite a surprise slowdown of US economic growth in the first quarter, the stock market has continued to climb higher. The S&P 500 is up by over 7% year-to-date. US equity REITs have been especially strong, already returning more than 17% so far in 2014. Meanwhile, the benchmark 10 year US Treasury yield has fallen from 2.9% to 2.6%.

According to the Federal Reserve Board, US economic growth and labor market conditions are expected to continue improving in 2014. At the same time, the central bank also vowed to maintain a stimulative monetary policy to support an ongoing recovery. Those conditions coupled with low inflation may set the stage for continued advances in risky asset prices.

Regardless of what may or may not happen with market prices, it is important for investors to take a step back and not get lost in the flurry of daily market movements. Remember that one of the most important things investors can do is to ensure their investment strategies are aligned with their objectives. Maintaining an appropriate asset allocation is imperative to that end.

With the stock market making new all-time highs, now may be a good chance for investors to review their portfolios and to rebalance them back to their target allocations. If you have any questions or concerns about your investments, feel free to reach out to BCM.

Victor K. Lai, CFA

This blog is for informational purposes only. Nothing on this blog represents advice. Investing is inherently risky and involves the potential for loss. Victor Lai does not own any of the securities referenced in this posting. Clients of Bellwether Capital Management LLC may own shares of the securities referenced in this posting.