4th Quarter 2014
December 31. 2014

Happy New Year!

The calendar has turned once again and as we look back on 2014 there are an abundance of milestones to be thankful for. From a market standpoint, US equities posted another year of gains ranging from single digits on the Dow to double digits on the S&P 500. Foreign stocks were down for the year, but small company stocks recovered in the 4th quarter and managed to stay positive. On the bond side, most were anticipating higher rates, which didn’t materialize, and allowed bonds to have another strong year of gains.

Looking forward to 2015, the story that continues to be front and center is the economy. The 3rd quarter GDP was revised upward to 5% which is the fastest growth since the 3rd quarter of 2003. With the Federal Reserve ending their bond purchases known as QE, the 4th quarter GDP numbers will be closely watched. Our belief is that as the economy continues to improve, and with the recent decline in oil prices, the consumer will benefit from lower energy costs. The 2015 forecast from AAA says US consumers could save an estimated $75 billion on gas alone. Since two-thirds of our economy is consumer spending this bodes well for the coming year. We fully expect more volatility ahead as the Federal Reserve eventually begins to raise interest rates and have positioned portfolios to take advantage of these opportunities.

Internally, the investment team has expanded with the addition of Todd Williams. Todd comes to us with a Finance degree from Texas A&M University, and most recently with Wells Fargo Private Banking. Todd’s experience, research and organization give us more capacity to expand our lineup of investment options and to provide continuous research for new opportunities. During the 4th quarter, Todd was instrumental in adding several new positions to our portfolios and more are planned for 2015. Our goal is to continue to deliver more consistent risk adjusted returns.

On a personal note, 2014 was my 20th year in the industry and was particularly special because of the release of my book “Retirement Done Right” which is a compilation of stories and lessons clients have taught me over my career. It took a year to write but it was rewarding to reflect back on the powerful message and real life examples I have been privileged to be a part of during my career. We are sending copies to every client. You should receive one shortly, if you haven’t already. If you know someone that might benefit from receiving a copy, please don’t hesitate to pass it along or let us know and we will be happy to send a copy.

We look forward to seeing you at your next meeting. As always, it is a pleasure to serve you. Please don’t hesitate to give us the opportunity to help you or those around you in 2015!

Dan Michalk, CFP®, ChFC