Back in January we wrote you:

“…But lest we get overly optimistic and confident about 2014, we expect the run-up we enjoyed in 2013 will regress some in 2014… And be prepared for some more volatility in 2014.  This is normal and would likely be related to financial or political issues in Washington, Europe, China, and the Middle East…”

Well, in the three-month stretch of the first quarter of 2014 we experienced extreme winter weather, unexpected geopolitical unrest, a Federal Reserve chairmanship transition, and a continuing sluggish global economy.  But despite that, the S&P 500 eked out a 1% gain.

Even without a lot of overly good news during the quarter, the financial markets proved resilient enough to fend off anything that looked like a threat to the stock market.

For a change we had some positive news out of Washington. There was lack of drama on the budget and the debt ceiling, and the Fed Chairmanship transition went smoothly.  The stock market likes “certainty” and Washington seemed to comply.

Unexpected global events are always wild cards.  In January no one would have predicted the “crisis” generated by Russia-Ukraine-Crimea.  Many believe it had an outsized impact on the markets and we would have had a pretty decent quarter otherwise.

Here in the U.S., the economy continues a slow slog forward.  Employment numbers are improving, inflation remains in check and corporate earnings steady.  With short term interest rates expected to stay low into 2015, more investors are venturing into the stock market because it is the only place to get a decent return on their investment.  But with a lot of money still in cash and on the sidelines, the potential for further growth is significant.

So what to expect?  With Congressional […]