Share this page: Live more abundantly. Pay it forward...
Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.



2014 Financial Market DataFinancial Markets Show Good Performance in 2013and show some promise in 2014

What is inside Wealth Building Now...
1-2-3 Credit & Me is now available...
What's Inside 1-2-3...
Think Smarter.  Live Better.  Success is Now.


SEARCH ATLANTA AREA HOMES
  
OTHER SEARCH OPTIONS

SITE SEARCH MAP    BOOK SERIES

amazon.com/author/thomas-tj-underwood

You can now start enjoying your life more and manage your credit in a smarter, more cost-effective, more time-efficient, easier-to-follow and easier-to-apply manner...

Learn how effective financial planning can change your life for the better...

The 3 Step Approach--updated in 2023, now available on amazon.com©2014, 2023...


Home Buyer 411 Updated©2014, 2023—also now available on amazon.com

100 money saving strategies...

Learn about 15 Questions that every home buyer should know the answers to “prior to” purchasing their home…

Axioms for Wealth Building Success...


Learn What To Expect In The Financial Markets In 2014


Since the major market downturn in 2008 the financial markets have made a steady climb.  2013 in particular was a good year for the market whether large-cap—small cap—or mid cap stocks.


Major market indicators for large-cap stocks (which represent about 75% of the market—S&P 500, Dow Jones Industrial etc.) was at a five year high and many large cap funds showed returns of over 25% in 2013.  Small and mid-cap stocks also showed returns of 25% or more with many funds.  Many Mutual Funds had returns over 25% as well!


In short—2013 was a banner year for the stock market. 


With steady returns in 2013 (roughly 30% or so) the S&P 500 showed an upward tick over the past 10 years with a 7.4% annual return. Mid-caps (S&P Mid-cap 400) 10.4% return and the small-cap Russell 2000 index was up 9.4% annually over the same period.



Not bad considering the dismal year of 2008 when many stocks fell at an astronomical level. 



2013 was a good year for the stock market as actively managed funds as well as exchange traded funds did quite well.   Many had returns over 30%—and those with low expenses (under .50) were real winners for investors in 2013.


In the bond market "the Fed" has continued its practice of purchasing bonds on a monthly basis by purchasing billions upon billions of dollars of bonds on a monthly basis.


However, with the declining jobless rate—they are intervening at a slower rate than in past years and that appears to be the approach of the Fed at this time—and in the immediate future.


The 10 year benchmark Treasury bond now yields more than 3%—the highest since the middle of 2011.


If that upward trend continues bonds may become more attractive to many investors as many believe the huge stock market returns in 2013 will be hard to duplicate in 2014—therefore, an increase in treasury bond yields may lead many who invest in stocks to prefer bonds.



Mortgage rates which are already at 4.50% in some areas (February 2014) are expected to rise another percentage to 5.5% or so in 2014 in line with the expected movement of Treasury bonds (Treasury bonds are expected to rise from 3% to possibly 4% in 2014). 



As an active real estate broker—I do not recall the interest rate being at 5.5% or higher since shortly after the financial market collapse in 2008.  Inflation is expected to be fairly stable in 2014 with only modest increases expected and "the Fed" is looking forward to an unemployment rate of 6.5%.


Another area of concern for many consumers are the dismal returns that they receive from their savings accounts—whether it be a regular savings account, a money market account, a money market mutual fund or bank CD's.


And with emergency funds invested heavily in savings account,  money market accounts,  money market mutual funds and bank CD's—most emergency fund balances have been stagnant (returns are very low at this time).



The returns have been dismal over the past 5 years or so and look for that trend to continue in 2014. 



It is important that you realize that savings rates are often tied to the federal funds rate (the rate at which banks borrow reserves from each other) which has been at a disappointing .25% ("the Feds" use of open market operations affect this rate and include the buying of bonds and other open market maneuvers—mentioned below)—since 2008.



History & Purpose of "the Fed"



To give this discussion some context—it is important that you realize how "the Fed" was created and know its main or stated purpose.


The Federal Reserve System is often referred to as the Federal Reserve or simply "the Fed."   It is the central bank of the United States.


It was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system.


The Federal Reserve was created on December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law.



The Federal Reserve's responsibilities fall into four broad areas:



  • Conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices.


  • Supervising and regulating banks and other important financial institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers.


  • Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets.


  • Providing certain financial services to the U.S. government, U.S. financial institutions, and foreign official institutions, and playing a major role in operating and overseeing the nation's payment systems.



The Three Main Ways That The Fed Influences Monetary Policy



1) Open-Market Operations - The Fed constantly buys and sells U.S. government securities in the financial markets, which in turn influences the level of reserves in the banking system.  Open market operations are the most frequently employed tool of monetary policy.


2) Setting the Discount Rate - This is the interest rate that banks pay on short-term loans from a Federal Reserve Bank. The discount rate is usually lower than the federal funds rate, although they are closely related.


3) Setting Reserve Requirements - This is the amount of physical funds that depository institutions are required to hold in reserve against deposits in bank accounts. It determines how much money banks can create through loans and investments. Set by the Board of Governors, the reserve requirement is usually around 10%.



The Federal Funds Rate 



The use of open-market operations is the most important tool that is used to manipulate monetary policy.


The Fed's goal in trading the securities is to affect the Federal Funds Ratethe interest rate at which banks borrow reserves from each other and is usually "higher than" the Discount Rate (the interest rate that banks pay on short-term loans from a Federal Reserve Bank).


The Federal Open Market Committee (FOMC) sets a target for the Federal Funds Rate, but not the actual rate itself (because it is determined by the open market).


This is what news reports are referring to when they talk about the Fed lowering or raising interest rates that you may often hear or read about.


Now that you have some insight on what the markets currently look like and you have an idea of where they are possibly headed in 2014be sure to go to our investment page and other pages on this site so that you can get added insight on how to invest in a manner that will work for you and your familyin good and bad times!




Return to Top


Return From 2014 Financial Market Data to Investments & Personal Finance Page


Return From 2014 Financial Market Data to Retirement & Personal Finance Page


Return From 2014 Financial Market Data to Realty 1 Strategic Advisors Home Page



Our Latest release © 2023, "The 3 Step Structured Approach" now available on amazon.com


NEW BOOK ©2021, 20231-2-3 Credit & MeNow Available

Learn what others are saying about our latest blog (Summer 2014)

Purchase "The Wealth Increaser"
TODAY...

Learn more about "The Wealth Increaser"


Learn about what is inside of "The Wealth Increaser"...



About This Article:

 

The above article was written by Thomas (TJ) UnderwoodThomas (TJ) Underwood is a former fee-only financial planner, a former top producing loan processor and is currently a licensed real estate broker in the state of Georgia. 


He is the writer behind The Real Estate & Finance 360 Degrees Series of Books that include The Wealth Increaser, Home Buyer 411 The Smart Guide to Buying Your Home, Home Seller 411 The Smart Guide to Selling Your Home, and  Managing & Improving Your Credit & Finances for this MILLENNIUM.


In addition he is also the writer who created The 3 Step Structured Approach to Managing Your Finances, and CREDIT & FINANCE IMPROVEMENT MADE EASY—NEW GUIDE that you can download right now "(at MIMIMAL cost $3.95)" to learn more about his writing style and how you can achieve "more" success in the current economy.


He is the creator of TheWealthIncreaser.com where he regularly blogs about helping consumers improve their credit, finance and real estate pursuits in an intelligent, consistent and proactive manner. 


He’s always looking for ways to make intelligent finance improvement happen for those who “sincerely desire” success in their future. He was the first financial planner to coin the phrase "financially alert mind"  and he consistently writes in a style that is designed to provide consumers the ability to take control of their lives and achieve great results.


You can contact him from a number of sources but the most direct way is to contact him through the contact us block that can be found at the bottom of this page.  You can also get highly relevant tips on "living your life more abundantly" and link to TheWealthIncreaser.com and possibly earn revenue by logging on to TheWealthIncreaser.com.


He is also an IRS registered tax planning professional with over 30 years of tax experience and can be reached at:


ATLANTA TAX PREPARATION SERVICE


https://www.ptindirectory.com/tax-preparers/georgia/peachtree-city-ga/652454/tfa-financial-planning/tom-j-underwood-afsp-rtrp


LOCATIONS:


Atlanta South Location:


Realty 1 Strategic Advisors, LLC

77 Prestwick Lane

Peachtree City, GA 30269


770-719-4550 (Direct)

tj@realty-1-strategic-advisors.com


Atlanta Central Location:


Realty 1 Strategic Advisors, LLC

2940 West Stubbs Road

Atlanta, GA 30349


404-952-9284 (Direct)

tj@TheWealthIncreaser.com






Share this page: Live more abundantly. Pay it forward...
Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.

The 3 Step Approach--updated in 2023, now available on amazon.com...



IF YOU DESIRE TO LEARN MORE ABOUT THE LUXURY HOME MARKET IN THE ATLANTA METROPOLITAN AREA—MAKE THE REQUEST BELOW


Jumbo Mortgage Loan News----Atlanta Luxury Home News


Please note that all fields followed by an asterisk must be filled in.

Please complete the challenge that you see below.