January 2015 Market Commentary

December will go down as a month that properly summed up 2014:  Lots of volatility.  The first two weeks saw a serious downtrend, only to be followed by a nice rally, and then a large dip to end December and the first few days of January as well.  In many of our portfolios at TD Ameritrade we “bought the dip” after the market lost, which gave us a nice monthly return in most portfolios.

The debate about the US economy is really dependent upon the global economy.  Europe, China, Japan, Brazil, and Russia have all had disappointing data recently, so it begs the question:  Can the United States economy move forward if most of the developed world is slowing down?  We feel that most Americans have a little more money in their pocket because of lower gas prices and that should provide a boost to the stock market in the first quarter.  Time will tell, and we’ll be monitoring the markets on a daily basis to make sure we’re prepared.

Barron’s interviewed over 30 economists in December of 2013, asking them what would happen to interest rates.  All 30 economists predicted higher interest rates.  Quite the opposite happened, and interest rates dropped dramatically in 2014.  Barron’s once again interviewed economists this December and the outlook once again is for an increasing interest rate environment.  Which way interest rates move has a large effect on bond and bond fund values, so it is of the utmost importance that these rates are watched closely.  We plan to do that throughout 2015.

INTERESTING NOTES

Oil! – U.S. oil output hit 9.1 million barrels in December, 2014, marking the highest level of production since the U.S. Energy Information. This level is expected to grow.  –  The Wall Street Journal, December 10, 2014

Government Investment – The Treasury Department said the 2008 Troubled Asset Relief Program has returned $441.7 billion on the $426.4 billion invested – MarketWatch, December 20, 2014

Apple Investment – Thirty-four years ago, Ron Wayne, co-founder of Apple, bailed out early by selling his 10% stake for $800. Today, that 10% stake would be worth roughly $64,400,000,000. – Bloomberg, December 11, 2014

Jack Daniel – The U.S. military buys more Jack Daniel’s Single Barrel whiskey than any other purchaser in the world – Business Insider, December 10, 2014

New Year’s Day – More vehicles are stolen on New Year’s Day than any other holiday. – National Insurance Crime Bureau, 2012

The Ball Drop – Times Square’s New Year’s Eve Ball was first dropped in 1907 because of a fireworks ban. Back then, they dropped a 700-pound ball made of iron and wood and embellished with 25-watt bulbs. Now, however, it weighs 11,875 pounds, spans 12 feet in diameter, and is adorned with 2,668 Waterford crystals. – International Business Times, December 27, 2014

Resolutions – Just 8% of people achieve their New Year’s resolutions. – Forbes, January 1, 2013

Oprah Says: – “Cheers to a new year and another chance to get it right.” – Oprah Winfrey

Market Performance