More on 2014 results

From Zacks:

The S&P 500 produced a +13.7% return in 2014. That sounds pretty good until you start peeling back the layers such as:

* Most of the gains were in the most conservative stocks (utilities and pharma).

* Small caps stocks gained only +4.9%. Much of that return coming just from dividends.

* The average US stock mutual fund gained only +7.6% on the year. In fact, studies show that 2014 had the most fund managers underperforming the S&P 500 of any period in the last twenty-five years.


Additionally the 10 year treasury bond ETF TLT posted a 23.6% gain in 2014 as yields continue to drop.

Saul, I know you are not a fan of bonds, and I agree with you, but some global market dynamics now are very strange. Germany is issuing 5 year bonds with a 0% interest rate. US rates under 2% seem like a bargain compared to that. That is insanity!

I’m not saying I’m bailing out, but I have been getting more and more cautious in recent months.

Just some food for thought for the board here. I’ve learned a lot here and think it is even more important to find the qualities companies now, as a lot of the also rans aren’t going to be able to hang anymore.