April 5, 2013 - Quarterly Commentary



Wow! What a great quarter!

Think back for a moment to the end of 2012. Earnings growth was "failing"; the Fiscal Cliff fight was raging with predictions of catastrophe from the Sequester to come; and, the returns in 2012 had been good enough that no one wanted to forecast a repeat in 2013. Even Hollywood blockbusters donÕt do doomsday scenarios any better!

The markets, of course, paid no attention to the noise Ð and neither did we. As usual, we rebalanced portfolios at the start of the year, making sure we had plenty of funds allocated to the various asset classes, so that even a major correction in any one of them, while unpleasant, would not harm individual goals too much. As we do each year, we asked everyone to review any cash needs for the year, so that we would not need to sell anything if we went into a downturn Ð yes, we know Ð boring, boring!

Surprise! The U.S. stock markets charged out of the starting gate this year with some categories reaching record breaking highs. The S&P 500, perhaps the most widely followed barometer of the US stock market, was up 10.57% in the first quarter. The Russell 2000 Small Company and the S&P 400 Mid Cap Indexes were up 12.3% and 13.5%, respectively. Leading the markets higher were the Healthcare and Consumer Staples sectors, with the notable laggards being Technology and Materials. International and Emerging Markets did not fare well as a myriad of issues faced the Eurozone, and growth is slowing in the BRIC (Brazil, Russia, India & China) areas.

In the meantime, bonds continued near their all-time highs, too. While interest rates are at historic lows, with seemingly nowhere to go but up, we were recently reminded by the Federal Reserve that any rate increases would only follow "substantial" improvements in the labor market and increased inflation. Given our continued modest recovery, interest rate hikes may not occur until 2015 under this plan. We intend to keep holding bonds in portfolios in spite of the threat from rising interest rates; our focus will be on shorter terms and incorporating international bonds. The international markets are relatively cheap and we will also maintain those positions. Neither those holdings, nor the bond positions have a chance of outperforming a spectacular US stock market. We will be glad we held onto our other assets at some future point when the market surprises to the downside. For now, we will certainly enjoy the recent gains.


Office Notes - WELCOME

Stephen Weatherby, CFP¨ joins us with over 12 years of experience, most recently working with military families on their unique circumstances. We are thoroughly enjoying the insights he brings to us and hope you will meet him soon. Stephen enjoys participating in sports and spending time outdoors with his family.

Brian Rettig, CFA ( Chartered Financial Analyst) who, with 17 years of experience is bringing a thoughtful approach to our Investment Department and will assist our investment research and coordination of portfolios. Practically a Denver native, having moved here when he was two, Brian enjoys Denver with his wife, Jen, and three young sons which keep him busy.

PLEASE NOTE: We will continue our tradition of closing our office at 1:00 pm on FRIDAY afternoons between Memorial Day and Labor Day to allow our hard-working staff to take advantage of the beautiful Colorado Summer. We would appreciate your calls on Friday mornings, if possible.

BEST WISHES FOR A VERY HAPPY 2013

Sincerely,
Sharkey, Howes & Javer Inc.

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April 2013 - "Wow! What a great quarter!" - Send To Friend

January 2013 - "Many Happy Returns" - Send To Friend
January 2012 - "A Stealth Recovery" - Send To Friend
July 2011 - "Déjà Vu" - Send To Friend
January 2010 - A Pleasant Suprise - Send To Friend
October 2009 - A Year Later - Send To Friend
July 2009 - Bond Markets and Inflation Fears - Send To Friend
January 2009 - Be Greedy - Send To Friend