In 2014 equity markets picked up in the second quarter as compared to the first quarter of this year as the Global Dow Index (GDOW) increased +4.8% in the first half of 2014. US markets finished up slightly with the Dow Jones Industrial Average (DJIA) advancing nearly +2%.
We continue to overweight stocks versus bonds because we believe most of the slowdown in economic activity has passed as normal weather patterns emerge and consumer spending picks up steam.
Our investment portfolios tracked markets so far this year. Looking forward, we continue to believe second quarter earnings will be solid. If so, better earnings may even be a catalyst to move markets higher before the end of 2014. U.S. auto sales and home purchases remain strong and we believe this will help the markets this year.
Our investment approach is to buy companies with consistent earning power, high return-on-equity, while employing little or no long-term debt, and to purchase at reasonable prices. We have a system that filters thousands of stocks on a weekly basis using an in-house checklist that screens the highest quality companies, which are then reviewed and considered for purchase in your portfolio.
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DISCLAIMER: The investments discussed are held in client accounts as of June 30, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable. Past performance is no guarantee of future results.
