“I don’t want to make money. I just want to be wonderful.” Marilyn Monroe
Marilyn was surely wonderful. If she had been here in 2013…she would have made plenty of money, too. This was a record-breaking financial year. Equities enjoyed their biggest boom since 1997. The benchmark S&P 500 soared 29.6% to an all-time high of 1,848. The Dow Jones Industrial Average sailed 26.5% to a record close of 16,576. Within the S&P 500, 91% of stocks (457) went up in 2013.
As investor confidence grew, and banks offered little interest, the money flowed into the equity markets. Small company stocks and technology, considered more risky, were some of the hottest performers in 2013. The Russell 2000 Index jetted up 37% and the tech-heavy NASDAQ sizzled to a gain of 38.3% for the year. The luster of gold disappeared as it suffered its worst loss in 32 years. Most other commodities were also depressed in 2013. Real estate managed a gain of 3.2% after a 20.1% return in 2012.1 Many bonds took big hits to their values last year. Junk bond funds bucked the trend and survived the onslaught with an average gain of 7%.2
Who and what made it to the top in 2013? The top grossing movies were Iron Man 3 ($1.2B), followed by Despicable Me ($918M), and Fast and Furious 6 ($788M).3 (From the latter film, fiction became reality as we lost good guy actor and car enthusiast Paul Walker to a fiery car crash.) According to the NY Times, the best-selling books in 2013 were John Grisham’s “Sycamore Row”, Donna Tartt’s “The Gold Fish”, and Mitch Albom’s “The First Phone Call from Heaven”.4 The highest paid musicians last year were Madonna ($125M), Lady Gaga ($80M) and Bon Jovi ($79M). The top US cities for travel were Charleston, San Francisco, New York, and Chicago. Internationally, the favorites were Bangkok, Istanbul, and Florence.5 Amber Riley and Derek Hough won the top prize on Dancing with the Stars. Food & Wine announced their top new chefs: Danny Bowien at Mission Chinese NY and SF, Justin Cogley from Aubergine, Carmel CA, Jason Vincent from Nightwood in Chicago, and Michael Voltaggio from Ink in LA. The highest rated TV Shows were NCIS, The Big Bang Theory, and Monday Night Football.6 Google says the top trending searches in 2013 were Paul Walker, Boston Marathon Bombing, Cory Monteith, Nelson Mandela, and I-Phone 5.
Success for Pacific Sun Financial in 2013 was achieved in several ways. Our client assets increased by 23%. We welcomed 15 new clients from your 45 introductions. We completed 14 of our 24 projects: improving client services, remodeling our website, and upgrading our technology…to name a few.
A few days before the stock market fall of 1929, Joseph Kennedy was having a shoeshine. A skinny kid from the Bronx, Pat Bologna, was buffing away while offering stock tips to the elder Kennedy. As he stared down at his gleaming shoes, it occurred to Kennedy that if shoeshine kids were investing in Wall Street, the market was out of control. As the story goes, the millionaire quickly liquidated his portfolio and saved his fortune. Thirty years later, this fortune helped his son, John F. Kennedy, become President of the United States.
“Patience, persistence and perspiration make an unbeatable combination for success.” Napoleon Hill
This past year, the economy and financial markets have survived a government shutdown, tax hikes, healthcare reform, terror threats, a bombing in Boston, an imminent invasion of Syrian, volatility in Apple shares, fears of Fed tapering, and the threat of a US debt default. On December 18th, as TV pundits predicted a downturn, the Dow rocketed 291 points upward after the Fed announced fewer treasury bonds would be purchased in 2014. It requires a great deal of patience to wait for buying opportunities in this seemingly unstoppable bull market. This past year, between August 2nd and August 27th the Dow dropped 882 points. A month later, on September 18th the Dow was at 15,676. It plummeted 900 points in 20 days. These “windows” will likely occur in 2014…and waiting for lower prices should pay dividends.
Tax Reform: There is virtually no chance of a comprehensive tax overhaul in 2014 according to seasoned Washington observers. A few proposals may receive some attention: state’s ability to tax part-time residents, online and mail-order sales tax collections by out-of-state retailers, and consolidation of federal higher-education benefit programs. If Senator Ron Wyden becomes the next head of Senate Finance, there could be a push for fewer tax brackets, the elimination of the alternative minimum tax, and a top capital gains tax rate of 23%.7
According to psychotherapist Amy Morin, mentally strong people avoid these things: 1. Dwelling on the past; 2. Wasting energy on things they can’t control; 3. Repeating the same mistakes; 4. Fearing the results of taking a calculated risk; 5. Worrying about pleasing others; 6. Shying away from change; 7. Wasting time on feeling sorry for themselves; 8. Giving away their mental and emotional powers to others; 9. Resenting other people’s success; 10. Giving up after failure; 11. Fearing time alone, and 12. Expecting immediate results. How many of these mental strength characteristics do you share?
It would be quite a feat to repeat the record-breaking successes of 2013…but we will try. I promise to keep on working for you as long as you will have me. I have no plans to retire as long as this work is challenging and fulfilling. Your loyalty and appreciation makes the work worthwhile. These words reside on my desk and have special meaning:
“I expect to pass through this world but once. Any good therefore that I can do…or any kindness or abilities that I can show to any fellow creature…let me do it now. Let me not defer or neglect it, for I shall not pass this way again.” William Penn
Best wishes for health, happiness and prosperity in 2014.
Today’s the day.
Mitch Fisher
1 National Association of Real Estate Trusts 12/31/13
2 LA Times 12.31/13
3 E On Line News 12/31/13
4 NY Times 1/1/14
5 Travel & Leisure
6 Nielsen Ratings 2013
7 The Wall Street Journal 1/3/14
8 Forbes 11/18/13