The first half of 2014 is almost over, and it certainly came with a lot of surprises. Here are just a few.
First, while the market hardly reacted, the first-quarter GDP numbers were abysmal, with gross domestic product declining 2.9 percent despite the fact that the economy was supposedly improving to the point where we were less dependent on Federal Reserve stimulus.
Second, the stock market didn’t live up to expectations. The strong gains we saw in 2013 got people’s hopes up, and while stocks rallied in the first half, the gains were small. Furthermore, the market favorites (i.e., the high-growth stocks that led the market higher in 2013) underperformed.
Third, safe haven assets performed extremely well. The three I have in mind include long-term Treasuries, gold, and utility stocks. Each of these groups, especially the first two, were hated by the market last year, and yet they each delivered double-digit returns.