Weather Dominated 1st Quarter 2014

Construction Impeded
This past quarter saw severe weather in most parts of the United States. The weather had an impact on many sectors. One of the effected sectors was home construction. New home construction took a dive. In addition, construction of new malls and shopping centers was negligible.  This was not good for the overall economy, but it did have a positive impact on real estate investment trust earnings and growth. Due to the lack of construction, the value of existing commercial properties in some areas rose, with demand exceeding supply. This also created an opportunity to continue to raise rents. The result of the combination of rising value and rising income gave this sector of the market a remarkable gain for the quarter.

A Paradigm Shift in Energy!

Six or seven years ago, the U.S. was very concerned that the balance of payments was showing large deficits year after year. Much was attributed to importing oil from overseas.  Oil production in the U.S. was in decline and the large reserves found in Alaska were beginning to dwindle.  The picture was not good. A byproduct of this was that energy costs in the U.S. were going up, reducing the capital spending of corporations and consumers as they spent more on energy.

Equities vs. Bonds

Third Quarter 2013
When you sit back and look at the stock market over a sufficient period of time, you can develop perspective. When you are looking at it daily, however, you may lack perspective and become emotional. The third quarter was a period that requires perspective to remain objective.