4th Quarter 2013
December 31. 2013

Happy New Year and Welcome to Waterway Wealth Management!

Thank you for your support, commitment and loyalty during our transition this past December. This change will allow us to focus on you and provide a higher level of personal service. We look forward to the opportunity to serve you as we move forward.

During 2013 equity markets grew over 20%, while the bond market struggled to hold any gains as interest rates finally started their expected rise. Although we are glad to see solid returns in stocks, we remain cautious. Economic growth over the last 2 years has been sluggish, yet the stock market has given us above average returns. The Federal Reserve’s announcement to reduce the amount of bond purchases (QE) from $85 billion to $75 billion per month is a welcome sign that they are seeing some strength in the economy and no longer need to make that level of bond purchases. We have been a proponent since mid-summer that the “taper” in purchases needed to happen. This will provide us with a clearer picture of the economy.

Our outlook for the future is optimistic, yet cautious. One of the greatest assets, in our opinion, has been the development of domestic natural resources (oil, gas, etc.). Companies are bringing manufacturing, formerly overseas, back to US soil on a regular basis. Improving real estate markets, low inflation along with domestic energy production, are all key elements of our optimism.
The challenges that still remain include: the federal deficit, healthcare, unemployment and higher tax rates which went into effect January of 2013. This will take time to play out, but will be a drag on the economic growth over the next 3-5 years.

2014 will continue to be a time when balance in your portfolio is paramount to protecting gains, but also positioning for the growth that is on the horizon. The economy has managed through many difficult times before and we will persevere once again. At some point in the future, we will see additional volatility in the markets which will present us with opportunities to add to discounted assets rather than reduce positions. We are fully prepared to take advantage if, and when they come.

We look forward to seeing you in your spring review meetings.

David Michalk, ChFC

2017-05-20T19:56:43+00:00