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Forget Santa, 2014 has been good to some investors, not so for others

By Dian Vujovich

Each year brings with it so many market expectations it’s impossible to make everyone happy. And surprise surprise, 2014 has been no different.

Here’s a quick, brief and broad brush rundown of what’s happened during the first 11 months of 2014:

-The Fed’s QE program has worked better than many anticipated.

-Worries of inflation and higher interest rates impacting stocks negatively haven’t been worth worrying about.

-Hedge funds, in general, have had a rough go of things. Some 4000 of them have closed their doors since 2008. About 400 are expected to do so this year. To be fair, many hedge fund shops are one- and two-people offices. Even with the high fees hedge funds charge their high-income clients, bad investment picks result in bad performances no matter how you slice it or who is running the fund.

-Close to 85 percent of actively managed large cap stock funds have failed to outperform the yardsticks/indices they use as benchmarks. That’s the worst performance for this group in 30 years, according to SeekingAlpha.com.

-Many index funds and ETFs, on the other hand, have had plenty to crow about. The average S&P500 Index fund, for instance, was up over 13.6 percent year-to-date as of 11/26/14, according to Lipper.

-The DJIA and S&P500 are at record highs.

-Bond funds continue to provide investors with plus-returns. The average general domestic taxable bond fund, through Nov. 26, was up 4.1 percent, according to Lipper. Real short fixed-income choices—like money held in money market mutual funds and savings accounts— hardly any. I’m continued to be puzzled why anyone would put money into a savings account or money market account with yields so low they’re not worth mentioning unless, of course, they are going to need that money in the near future. Or, hate taking any financial risks, have enough money they don’t need or want to make any more, or are afraid of the markets. If fear is the reason, that four-letter word has a history of backfiring on us. But that’s a subject for another day.

-Precious metal investments haven’t been so precious after all. Gold and silver are up from their 52-week lows but not by a lot.

-The price of a gallon of gas is delightfully low these days— even for those with gas-guzzling vehicles. Cheaply priced gas translates into more money in everybody’s pockets. Money that we all know is easily—and often quickly— spent.

-Cars seem to be the gift to give—or get—this holiday season. I just saw two magnificent Bentley convertibles on Worth Avenue this afternoon. Once upon a time I bought a Porsche just because I looked good in it. I would look very good in the baby blue B convertible with that cream leather interior I saw while shopping. Hoping Sugar Santa hears that.

-As for retail sales, the jury is still out. But with that extra gas money, and sales galore everywhere and every day online and off, who knows.

With four weeks left in 2014, it’s anybody’s guess as to what the final numbers for the year will reflect. More important that the numbers, however, is how your overall investment portfolio has performed. I’m hoping your results now and then are delightful.

To read more articles, please visit the column archive.

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