2014 Outlook - The List
6 Jan 2014
So what to expect in 2014? Many of the conditions of the last few years - slow growth, low interest rates, and very low inflation - are likely to persist. Not an ideal environment, but one that should support further gains in stocks, and perhaps hints at a virtuous cycle of global growth that could be possible if the stars align.
However, there are risks to consider. We expect interest rates to climb, which could expose traditional bonds to potential losses. Given the strong run-up in stocks over the past few years, now is a good time to consider diversifying. Moreover, political dysfunction in Washington (and geopolitical events) presents a risk of increased volatility in the US.
Where does this leave investors? Although many continue to sit on the sidelines, we believe the risks of not investing—missing out on market gains, having your cash holdings erode due to inflation—outweigh the risks of being in the market. There is no free lunch, and there are risks to be aware of (and to manage), but meeting your financial goals means taking steps today.
That’s why we collected our 8 best ideas for the year ahead, which we call The List. We offer four “what to know” items and four “what to do” ideas, each with a specific takeaway—designed to help you navigate the markets in 2014.
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