Looking back at 2013 through key market indicators we see that there was relatively low volatility in 2013, a continued improvement in the housing market, very low inflation, and continued steady economic recovery. Corporate debt levels continued to decrease, consumer spending was up and the unemployment rate continued to show slight improvement each reporting.
Over the last 5 and 10 year periods US stocks, international stock, US bonds, global REITs and commodities all are in positive territory. Over the last three years only commodities and emerging markets have posted losses. In 2013 there was a large difference in performance compared to US core holdings and portfolio diversifiers such as commodities, bonds and emerging markets.
Looking forward into 2014 many analysts see more of the same from the US economy, meaning low inflation, near 3% GDP growth, further stabilization in housing, and continued improvement in unemployment. The global economy should continue to improve as central banks coordinate supported growth. No past performance will predict future performance, so don’t get greedy. As the stock market takes a January breather to validate its 2013 run up, you should consider doing your annual portfolio rebalancing and reevaluation of your risk tolerance.