A Rising Tide Lifts All Markets In The First Half Of 2014

Includes: DIA, QQQ, SPY
by: David I. Templeton, CFA

With the close of trading Monday, the first half of 2014 is now in the books. The months seem to click by more quickly each year. As the below index return chart shows, the indices displayed all have relatively healthy returns except for the lagging small cap index. The return data was obtained from S&P Dow Jones Indices and their report had very few negative returns for the indices they reported on. While many investors were and remain under weighted in international stocks, those markets had respectable returns as well.

From HORAN Capital Advisors

From a sector standpoint consumer discretionary stocks were the laggards while the energy and utilities sectors generated strong first half returns. The utilities strength can be attributed partly to the decline in interest rates since the start of the year as utilities are viewed as bond proxies by some investors. The 10-year treasury rate began the year just over 3.0% and closed today at 2.5%. As rates decline the price rises. Investors should keep in mind though, utilities really are not bond proxies as they will act like equity in an equity market correction.

From HORAN Capital Advisors

Our upcoming summer newsletter will cover a more in depth discussion about the second quarter, and more importantly, our thoughts for the second half of 2014.