WBI Asks: Is the Party Over?

In 2014, WBI celebrated the firm’s 30th year in business. It was a year of exciting activity and accomplishment. During the year, WBI launched 10 active ETFs, had the largest one-day asset raise in ETF history, rang the bell at the New York Stock Exchange, and introduced revolutionary enhanced SMAs. Most importantly, the firm continued to deliver on our goal to help investors protect and build capital.

Left: Matt Schreiber, President, and Don Schreiber, Jr., Chief Executive Officer (Photo: Business Wire)

The S&P 500 Index closed 53 times at record highs, climbing 13.69% in 2014. Other market gauges did not fare as well last year; the Dow Jones Industrial Average climbed 10.04% and small company focused Russell 2000 posted a modest gain of 4.89%. Domestic fixed income logged a decent year as the Barclays US Aggregate advanced 5.97%. However, despite positive gains for domestic markets, international markets had a tough year. The MSCI EAFE finished the year down 4.90%.

If history is any indication of what may happen in 2015, then one might expect US domestic markets to struggle this year. The current rally of 6 consecutive years of positive annual returns for the S&P 500 Total Return Index has now joined an elite club. Since 1928, the S&P 500 Total Return Index has posted 4 bull periods (out of 17) of 6 years (or more) of consecutive positive annual returns.

Periods of consecutive annual returns ended after year six 88% of the time. In addition, bull periods have ended 76% of the time before they reached year six. Over the past 87 years, consecutive periods of positive annual returns have lasted only 3.7 years on average. Bull market periods have ended 76% of the time before they reached six years in duration. And 88% of the time Bull markets have ended after six years. Will the markets continue to rally? History suggests the party may end sometime soon.

DISCLOSURE

Performance shown is not indicative of any investment. Past performance does not guarantee future results.

The views presented are those of Matt Schreiber and should not be construed as investment advice.

All economic and performance information is historical and not indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this document, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. WBI SMAETFProgram accounts are subject to investment risk, including the possible loss of principal amount invested. The ETFs used in WBIETFProgram accounts may investing other ETFs, mutual funds and Exchange Traded Notes (ETNs) which will subject the account to the additional expenses of each ETF, mutual fund or ETN, as well as to the risk of owning the underlying securities held by each. Options on securities held in an ETF may be subject to greater fluctuations in value than an investment in the underlying securities. In addition, ETFs may be subject to one or more of the following risks: market risk, model risk, management risk, dividend risk, growth risk, value risk, debt security risk, foreign market and currency risk, high-yield security risk, small and medium company risk, portfolio turnover risk, securities business risk, mortgage-backed securities risk, new fund risk and trading price risk. Moreover, you should not assume that any discussion or information provided here serves as the receipt of, or as a substitute for, personalized investment advice from WBI Investments or from any other investment professional. To the extent that you have any questions regarding the applicability of any specific issue discussed to your individual situation, you are encouraged to consult with WBI Investments or the professional advisor of your choosing. All information, including that used to compile charts, is obtained from sources believed to be reliable, but WBI Investments does not guarantee its reliability.

Information pertaining to WBI’s advisory operations, services, and fees is set forth in WBI’s current disclosure statement, as same is on file with the United States Securities and Exchange Commission, a copy of which is available from WBI upon request.

Index Definitions – You cannot invest directly in an index.

The Barclay’s Capital Aggregate is an index used to measure a bond’s relative performance within most U.S. traded bonds and some foreign bonds traded in the U.S.

The Dow Jones Industrial Average is a price-weighted average of 30 of the largest blue chip issues traded on the New York Stock Exchange.

The Russell 20000 is a measure compiled of about 2000 of the smallest securities and measures small-caps performance of the U.S. Equity.

The S&P 500 Index includes a representative sample of large-cap U.S. companies in leading industries. The S&P 500 Total Return Index (S&P 500 TR) includes the effect of dividends on performance.

The MSCI EAFE Index is a US benchmark that measures international equity performance outside of the US and Canada.

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