Winter 2015
Market Outlook – As we look forward to 2015, we believe we are entering the early stages of a mature bull market. We expect US equities will outperform the domestic bond market as continued economic and earnings growth allows tighter monetary policy and the risk of higher short term interest rates. As prudent investors, our outlook is informed by independent research of the economy and the sectors in which we invest. Importantly, each year presents its own challenges and surprises that impact performance. Accordingly, we will touch on some of the risks identified relative to our base case market outlook.
Summer 2015
Market Outlook – While U.S. economic growth has disappointed versus typical expansions, the capital markets have performed largely in line with our market outlook. U.S. stocks have considerably outperformed their fixed income counterparts thus far in 2015. U.S. equity indices are at or near record highs while bond market yields have recently begun to move higher. Year to date S&P 500 index returns exceed 4% while U.S. broad bond market index returns have returned less than 1%. Given the current phase of the credit cycle, we anticipate equities and credit should outperform government bonds. With that said, our outlook calls for higher volatility to dampen returns for stocks and higher interest rates to limit returns for bonds in the year ahead.
