Cash will be stable. High quality bonds with shorter maturities will be less volatile than stocks. And stocks (or more simply, ownership in the best run companies in the world) will once again be the most volatile.
OK, so it’s really not that bold after all, but that’s the GOOD NEWS! Indeed this is what we actually expect for the coming year and thus WHY we have positioned our clients’ portfolios in a manner that matches their short- and long-term goals and expectations. It’s also why we place NO CREDENCE in what all the so-called experts claim to be able to forecast for 2014.
In all seriousness, we’re barely one week into the New Year and I’ve already received 48emails from various financial publications and money managers with their guess/prediction for 2014 (Do that many people really get paid to guess for a living?). As you can imagine, they run the gamut from “a stalling economy” to “explosive economic growth”. The point is that this is the nature of investing in equities — in the short-run, it IS unpredictable.
If you’d like to see just how far-off some of these “experts” were in their predictions at this time last year, click on the picture below to read a short article. I’m reminded of a quote often attributed to Abe Lincoln or Mark Twain: “It is better to remain silent and be thought a fool than to open one’s mouth and remove all doubt.”