Let’s begin with a recap of Q1 2014. There are five major asset classes that MCS follows on a daily basis and will report on; Equities, Bonds, Commodities, Currencies and Real Estate.
The world economics have not improved nor have the US markets. Currently, the distortion of the US Equity Market compared with Global Markets is being reduced by the withdraw of QE.
Equity Markets: Major US Market Indexes are flat for Q1, International Indexes are slightly up, flat or down, and Emerging Markets are down roughly 4-5%.
Bonds: Sovereign Debt is flat, US Short Term Bonds are down significantly, Intermediate to Long Term Bonds are up slightly, Corporate Bonds are flat.
Commodities: Gold is up approximately 3% in Q1 and Energy is flat.
Currencies: have been volatile but are currently flat for the quarter including the US Dollar, Japanese Yen, and the Euro.
Real Estate: flat to slightly down for the quarter.
The world is currently undergoing a global and domestic transition from highly artificial financial policy to a more stable financial environment, that will provide a clearer correlation of asset classes. This transition will dramatically reduce risk as well as increase opportunities and the likelihood of positions in the above asset classes.
A flat-to-down environment is normal during a transition period of this magnitude. We expect volatility to continue to increase in 2014; that should allow for more entry/exit points.
In layman’s terms the financial world is currently still be held together by Duct-Tape. This jerry-rigged process is beneath the surface and has not been addressed by the mainstream media or the financial world. This does not mean it does not exist. Just as in Washington State, what lies beneath the surface was not visible to most people; thus loss of life and property came swift and suddenly and was devastating.
DISCLOSURE: Opinions and estimates offered constitute the judgment of MCS and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.
This article was written by Metropolitan Capital Strategies CEO Sharon Snow and Chief Investment Officer David Schombert.