March 9th marks the five-year anniversary of the market bottom of the Great Recession. For those investors who held on and followed our 10-year rule and were able to wait out the bear market, the S&P is up 209%. The Dow Jones Industrial average has a total return of 187%, while the NASDAQ is up 265%. The United States has outpaced much of the world, with emerging markets up only 127% over the same five-year period.
At the beginning of 2014, we talked about our predictions for the year, noting we expected 10-12% in earnings growth. We have seen fourth quarter 2013 earnings grow at 8.46%, which may give some hope of hitting that target. However, the second gross domestic product estimete for 2013’s fourth quarter came in at 2.4%, while the initial was 3.2%. Now. we see geopolitical unrest in Ukraine. How do any of these events impact 2014 forecasts?
The 10-year Treasury yield has fallen from 3.02% at year-end to 2.73%, currently. We expected it to increase 3.5%. Inflation has stayed very tame, which we expected. We still expect the S&P 500 to be up 10% to 15% for 2014. St Louis Fed president James Bullard expects 2014 GDP growth to exceed that of 2013. The Fed sees the economy remaining strong enough to continue winding down the stimulus. Additionally, consumer debt is at its lowest debt service level on record. We expect to see gains in consumer spending, as housing continues to recover and those who were underwater are able to refinance.
At Henssler Financial we believe you should Live Ready, and that includes understanding your long-term investment plan. If you have questions regarding your plan, the experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at firstname.lastname@example.org.