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Stocks brace for a bumpy ride
Wall Street Journal Feb 3 2014
A choppy start to 2014 underscores the need to play defense, say market veterans.
Many portfolio managers are shifting away from the kinds of investments that did exceptionally well in 2013 but are vulnerable to large swings. For some, that means paring back on U.S. small-company stocks in favor of shares of large companies with growing dividends. Others are focusing on shorter-term bonds based on expectations that rising economic output will lead to higher interest rates.
The S&P 500 index gained 30% last year, amid an improving U.S. economy and exceptionally loose Federal Reserve policy. Even more remarkable to many observers was that declines in the stock market were generally short and shallow. Accordingly, many investors entered 2014 expecting a slower advance marked by rocky stretches—a forecast that has been borne out by a 5% decline in the Dow Jones Industrial Average since the beginning of the year.
After last year's big rally in stocks, the market this year might gain "8% to 10%, but it's going to be a hard 8% to 10%," says Robert Smith, chief investment officer at Sage Advisory Services, which manages $10 billion out of Austin, Texas. "Investors are going to have to be really careful."
Tumult in emerging markets has been the catalyst for the recent bout of indigestion, along with the Fed's steps to pare back stimulus known as quantitative easing.
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Stocks brace for a bumpy ride
Dennis this title sure had me thrown off...I thought it was going to be about off road trucks. Which might be much safer than the actions of our Federal Government. It is amazing the amount of money they are spending, giving away and just wasting on this Federal Health Care Bill.
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Stocks brace for a bumpy ride
The Federal Reserve is the one printing the money to buy back bonds in an attempt to keep interest rates low. Spending is a whole other issue
I have been sitting on the side lines for the last two months looking for a correction to the Markets.
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