“Education is the best provision for old age.”
-Aristotle, from Diogenes Laertius, Lives of Eminent Philosophers
Overview
- 2014 should bring with it slightly better economic growth and a slow increase in real interest rates.
- We believe investors should continue to overweight equities in their portfolios.
- Additionally, we suggest avoiding Treasuries and TIPS and focusing on fixed income credit sectors.
- 2013: A Year of “Missed Risks”
- This year began with many focusing on what could go wrong. We had just gone through the “fiscal cliff” debacle, investors were worried about the European debt crisis, and the outlook for U.S. and global economic growth looked uncertain.
- Instead, however, 2013 proved to be a year when most major risks were avoided and the table was set for a strong investing year. The economic recovery continued (if unevenly), inflation remained low and, notwithstanding a mid-year jolt, interest rates rose (but not disruptively).
- In this environment, equity markets enjoyed an impressive year, with U.S. stocks up more than 25% and the major indexes hitting new records along the way. International markets also notched solid results, with the exception of emerging markets, which struggled with uneven growth and structural imbalances. Fixed income markets were choppy in 2013, with a long-awaited rise in interest rates finally occurring. As Treasury yields advanced nearly a full percentage point, bonds experienced a rare negative total return for the year (prices move in the opposite direction of yields).
- So what should investors expect in the New Year? From a broad perspective, many may feel a sense of déjàvu, since we expect most of the macro factors that existed in 2013 to persist: improving (but still relatively slow) economic growth, very low inflation and slowly rising interest rates.
- That said, we do expect growth to pick up modestly, both in the United States and globally.Although the Fed has begun its long awaited taper, policy remains accommodative and supportive of the economy. Lower energy prices and an improving housing market also represent tailwinds. In 2014, we expect the U.S. economy will edge past the 2% growth rate in which it has lived for the past couple of years and come in at around 2.5% to 2.75%. Global growth should accelerate from 3% in 2013 to around 3.5% next year.
- Another important theme we expect to see in 2014: Slightly better growth should lead to an increase in real interest rates. We do not believe rates will rise rapidly or dramatically, partly because the Fed will likely keep the fed funds rate anchored at close to zero through 2014, but we do think yields will climb modestly. We would look for an increase of around 0.5% for the 10-year Treasury over the course of 2014.
- Against this backdrop, we would advise investors to continue overweighting stocks in their portfolios. Equities may not be as inexpensive as they were a year ago, but they remain more attractive than bonds and cash. There are some important caveats to this view, however: We do expect more volatility in 2014 than we saw in 2013, and we think investors should be more selective. In particular, international stocks are worth investor attention, as they appear more reasonably priced than U.S. equities. We would also encourage investors with longer-term time horizons to consider emerging markets despite their recent underperformance, as they too offer compelling value.
- There are few bargains in fixed income markets. With rates likely to rise and inflation still low, we would avoid both long-dated Treasuries and Treasury Inflation Protected Securities (TIPS). Instead, we advocate sticking with fixed income credit sectors, including high yield bonds. Additionally, we believe municipal market fundamentals are sound and that muni bonds look attractive—especially as investors complete their 2013 tax returns and feel the impact of higher taxes.
· Expect an Improving Economy and (Slightly) Higher Rates in 2014
· Investment Themes for the New Year: Stick With Stocks; Focus on Credit in Fixed Income
Pdf.
BlackRock Weekly Investment Commentary – December 30 2013
A little about me and my expertise – video
LAND SPECIALIST – LAND EXPERT – INVESTMENT BROKER – ARIZONA
https://www.youtube.com/watch?v=PPs3kpKR4nY
http://en.wikipedia.org/wiki/Timeline_of_Phoenix,_Arizona_history
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Facts of Arizona – year 1848 to 2013
http://walter-unger.com/?p=9507
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Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial Investment Real Estate Broker in Arizona now for 20 years and I worked with banks and their commercial REO properties for 3 years. I am also a commercial landspecialist in Phoenix and a Landspecialist in Arizona.
WHETHER YOU LEASE OR OWN
NOW IS THE TIME FOR YOU TO EXPAND, UPGRADE OR INVEST.
we are at on the a rise of the cycle in Commercial Real Estate. so there is only one way and it’s called we are going up and now is the time for you to expand, upgrade or invest in Commercial Properties in Phoenix. The prices on deals I may get you will not be around forever.
WAITING TO SELL YOUR LAND ? TIMES CHANGE / IT’S TIME
We barely could give land away the last few years, but times are changing. Even in those meager years, I sold more land across the state than most other brokers. Before the real estate crash I was a land specialist in Arizona with millions of dollars of transactions, but then I had to change and also sell other commercial investment properties, which was fun, but I am a Commercial Landspecialist in Arizonal, a Commercial Land Specialist in Phoenix and love to sell land, one acre to thousands of acres.
If you have any questions about Commercial Investment Properties in Phoenix or Commercial Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion in Commercial Properties in Phoenix or Commercial Properties in Arizona with you.Obviously I am also in this to make money, but it could be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207 or Office:480-948-5554
PLEASE NOTE, I CHANGED BROKERAGES BUT CELL PHONE AND E-MAIL STAY THE SAME.
Thank You
Walter
Walter Unger CCIM
Associate Broker, West USA Commercial Real Estate Advisers
7077 E. Marilyn Road, Bldg 4, Suite 130
Scottsdale, AZ 85254
Cell: 520-975-5207
Office : 480-948-5554
Fax: (480-658-1172
View my listings and my profile at:
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a little about me and my expertise – video
commercial-investment real estate adviser-land specialist
https://www.youtube.com/watch?v=PPs3kpKR4nY
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