Do the first five days of trading in a new year give us any guidance on stock markets returns for the entire year? According to the Stock Market Almanac, you bet.
Global equity markets had a great year finishing 2012 with a strong fourth quarter rally. Asian markets were the best performer in the quarter and for the year although Europe was close to matching their gains. Currencies helped returns as the US dollar was weaker against most currencies except the Yen.
Stocks held onto their solid gains for the year despite the market selling off slightly in the fourth quarter. The S&P 500 posted its third consecutive year of positive results. For the full year the S&P 500 gained 15.99% and the NASDAQ added 17.73%. The fourth quarter saw a 0.38% decline from the S&P 500 and the NASDAQ dropped 2.48%.
Investors seeking yield are looking high and low for better yielding assets than corporate and government bonds. Dividend paying stocks received plenty of attention this year from both investors and the media. High yield bonds have been another beneficiary in this quest for yield.
Tax rates on dividends are going up in 2013 as part of the expiring Bush tax cuts. This isn’t news to anyone because of the media’s attention to the fiscal cliff.
There are a lot of acronyms that people who want to manage your investments have after their names. Making sense of this can be confusing for even veteran like myself. At least once a month I get an email with some new 3 or 4 letter acronym that has me saying “Wow, that’s a new one”.
Stocks brushed off a sluggish second quarter to move ahead over the past three months. Markets were helped when the Federal Reserve (Fed) announced their newest round of monetary policy dubbed “QE 3”. In the third quarter, the S&P 500 added 6.35% while the NASDAQ popped 6.53%.