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2013 Aldebaran Review of Stocks

In our last post we talked about the news stories that drove the world and the market in 2013. Now it's time to look at how those stories played out in the market.

Using the representative ETF (electronically traded funds) here's how the market played out last year:

ETF  YTD%
Major US Equities  
SPY - S&P 500 +29.69%
DIA - Dow Jones  +26.72%
QQQ - NASDAQ +35.05%
IJH - S&P Mid Cap +31.57%
IJR - S&P Small Cap +39.73%
   
Major Foreign Equities   
EFA - Foreign Markets EAFE +18.00%
EEM - Emerging Markets -5.76%
   
Bond Markets  
AGG - Aggregate Bond Index -4.19%
TIP - Inflation Protected Bonds -9.48%
TBF - ProShares 20+ Year Treasury Short +11.95%
   
Precious Metals  
GLD - Gold -28.33%
SLV - Silver -36.30%
   

The clear winners in 2013 were US Equities. For all the attention paid to the large cap issues of the major indices the Mid Cap and Small Cap space gained even more. Looking down into the S&P 500 by sector the only laggard of the group were Utilities. 

ETF YTD %
XLY - Consumer Discretionary +40.88%
XLP - Consumer Staples +23.15%
XLE - Energy +23.93%
XLF - Financials +33.37%
XLV - Health Care +39.02%
XLI - Industrials +37.89%
XLB - Materials +23.12%
XLK - Technology +23.88%
IYZ - Telecom +22.55%
XLU - Utilities +8.73%

Utilities lagged because of their linkage to the interest rate environment we find ourselves in. Anything that is normally purchased solely for the yield it provides was hurt this year. 

The fixed income market took a massive hit as the 10 Year Treasury moved from 1.86% at the beginning of the year to 1.66% at the beginning of May and ending the year at 3.04%

I won't spend much time on it, as it is a topic for a dedicated post, but as those rates rose the value of the underlying securities and those that price off them went down. We saw this in preferred stocks, utilities and any fixed income item that had any duration to it saw a pull back. 

The big winner in the Fixed Income market was to actually short the Treasury market this year. There were also wins in Floating Rate and High Yield but you needed to be willing to accept a bit risk in those markets.

In our next post we'll look at what might be ahead in 2014 but the general idea is that we continue to be in an environment of slow growth, low interest rates out of the Federal Reserve, and limited inflation. 

 

 

 

 

 

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