During this past month, the problems and difficulties of both Greece and China have been major news. At the June 17^th meeting of the Federal Reserve Board (Fed), they were already discussing the issues of these two countries and how they might impact the U.S. economy. Apparently, from the released report, the likelihood of the Fed raising rates is still in play.

We tend to look at what we own and what we owe in a rather abstract way.  Perhaps we own a home, car(s), some investments, a retirement plan(s), a vacation home or time share, art work, personal items, life insurance, pets, and other assets we don’t really think about.  We rarely think about what all this stuff is really worth.  We may understand that we can give away, as a gift, up to $14,000 annually to as many people as we like, and if we have a spouse that would amount to $28,000.

The markets can be uplifting at times and downright disappointing at other times. As long-term investors, we don’t want to look at short-term swings in the marketplace. It drives me nuts when clients tell me that they look at their accounts on a daily or even weekly basis. If you do so, you will drive yourself nuts. A recently retired client told me he was looking at his investments on a daily basis (I thought he should get a better hobby).  One day his portfolio went up and he slept like a baby.  The very next day, the portfolio went down and he couldn’t sleep.

The first quarter of 2015 is over. The stock market went up, the stock market went down. It kept doing this all during the quarter. At the end of the quarter, the Dow Jones Industrial Average, an index of 30 blue chip stocks, had dropped 0.3%. The S&P 500, a much broader index of the market, was up 0.4%. In summary, not much change to either of the indexes.  What was more apparent was that other asset classes did better than the U.S. stock market during the first quarter. I am always emphasizing diversification and this quarter was an excellent example of why it is so important.

The price of oil has dropped by about 55% in the past year, causing a great deal of disruption. The economies of many oil producing countries are being devastated by the drop. The cost to produce the product has become greater than the selling price in many places, resulting in an economic imbalance. To mitigate this price drop, a reduction in staffing and production by oil companies might help, but in third world countries, a significant reduction in employment could result in some form of uprising.

For some it was a good year, for others not so much. For investments, it was mostly a good year, with both stocks and bonds benefiting from the growth of the U.S. economy. Foreign investments did not fare very well, as currency values shrank relative to the dollar, and foreign economies were stagnant. Commodities were mixed, with oil being the major game changer, as the price fell by more than 30%. What will 2015 bring? Will we see oil rebound, the U.S.

At this time of year, I like to look back to a year ago and see if we are better off now than we were then. On balance, it appears that, both economically and financially, we are better off this December than we were a year ago. Many jobs have been created, unemployment is lower, consumer confidence is greater, factory production is higher, and all of this is happening as the Federal Reserve withdrew its economic stimulus. Not bad! If I were looking at Europe, China, Japan, Russia, or most of the rest of the world, I could not say the same.

At this time of the year we get an opportunity to take some quiet time and count our blessings. As for myself, I have many blessings to be thankful for this year. Above all others is my oldest daughter’s most recent MRI, showing her to be cancer free. I have many other things for which I am grateful, such as living in this country, having a caring and loving family and fellow workers, whom I enjoy being with each day. Much of what I am grateful for would not be possible without the support of you, my clients and friends.

A great deal of economic data has been released in the past couple of weeks. The most important news was a report from the Commerce Department indicating that the GDP of the U.S. grew at a rate of 3.5% during the third quarter of this year. Thus far in 2014, the growth rate for the three quarters has now averaged 3.5%. 

Let’s go way, way back in time and look at the stock market. I’m talking about that time long ago when the S&P 500 had dropped through the floor and had “crashed” down to 1863. Now to understand the significance of the “crash”, you must remember that--back even farther--the S&P 500 stood at about 2011. This means that the S&P 500 had dropped more than 7%.