2014 review and expectations.

PORTLAND, OR, October 21, 2014 /24-7PressRelease/ -- The third quarter of 2014 continued our current pattern of slow and steady global economic expansion, but it also brought back higher levels of volatility seldom seen over the last couple of years. The S&P 500 gained just more than 1% over the last three months, while European stocks fell nearly 6% and domestic Small and Mid-Cap stocks fell more than 7%. Many trading days leading to the end of the quarter produced swings greater than 1%, negative and positive. These levels of volatility, which we haven't seen much of since 2011, can begin unnerving investors quickly.

We remain bullish over the next year and foreseeable future, but note there are significant risk factors for broad market turbulence in the near-term. With rising geopolitical issues particularly in the Middle East, Russia and China along with a lingering slow-growth scenario for Japan and most of Europe, any shift in the current policies of the Fed or Central Banks could cause market turbulence. However, again, we believe these are near-term risks and investors should keep their time horizon in mind; the longer it is, the safer it is to be in equities.

While price (stock prices) to earnings ratios are slightly above historical averages, corporate earnings remain strong and continue to grow at a moderate pace. In addition, positive economic signs like the recent jobs figure and the Fed's low inflation estimate of 1.4 - 1.6% continue to bolster the US market.

The September 30, 2014 year-to-date major index returns are:

BarCap US Aggressive Bond - 4.10%
S&P 500 - 8.34%
Russell 2000 - 4.41%
MSCI EAFE (Europe) - 1.38%
MSCI EM (Emerging Markets) - 2.43%

This year has seen yet another surprising decrease in interest rates, which has helped bonds recover from their disappointing results in 2013. A rising interest rate environment, to some degree, is nearly inevitable. Rates will rise. The market and general financial industry believes this will occur sometime during the middle of 2015. We've allocated our bond portfolios for a rising interest rate environment for well over two years now and believe holding that stance is prudent for our more conservative clients. It hasn't been the play in 2014, but it sure helped us in 2013 and will again sooner rather than later. Our short-duration strategy gives clients an opportunity to outpace inflation with very little interest-rate risk.

Overall, our recommendations have changed very little quarter over quarter in 2014. We continue to overweight equities while positioning bond portfolios for a rising interest rate environment. We believe there are good opportunities to be found within domestic and international markets, and we specifically like the value and opportunities we're seeing within the areas of Financials, Technology, Healthcare, Energy and Real Estate.

We will most likely experience more volatility as we close out this year. Again, as the market fluctuates, keep your time horizon in mind; the longer it is, the safer it is to be in equities.

Thank you for your continued confidence.

Sloy, Dahl & Holst, Inc. is a registered, full-service financial advisory firm dedicated to our clients' financial achievement. As a boutique investment house, we tailor every investment portfolio we manage to meet each client's specific goals.

---
Press release service and press release distribution provided by http://www.24-7pressrelease.com