4th Quarter 2012 and 2013 Update‏

January 18, 2013 by  
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4th Quarter Update AND 2013 Outlook

As you know, SEI is one of our larger multi-manager platform investment strategies. To keep you abreast of current market conditions, we invite you to view SEI’s “Fourth Quarter 2012 Market Overview and Insights” video.  This brief video will provide you a synopsis of SEI’s positioning around the markets, the impact to SEI’s strategies, and SEI’s outlook going forward.

 
Looking back at 2012, the ongoing financial crisis in Europe and political strife in the U.S. dominated the headlines and set a negative tone. Fortunately, the results from the financial markets were significantly better than the sentiment.
 
What’s happening in the market?

 The MSCI All Country World Index, which serves as a proxy for global equity markets, gained 2.88% for the quarter and 16.13% for the year in U.S. dollar terms. For the year, all sectors posted gains with Financials and Consumer Discretionary again setting the pace.

 The Barclays Global Aggregate Bond Index, which represents global bond markets, fell 0.48% for the quarter in U.S. dollar terms. For the full year, it gained 4.31%. In periods, emerging market debt and high-yield bonds significantly outpaced their peers as investors favored riskier segments of the bond market in search of higher returns.

 U.S. equity markets, represented by the S&P 500 Index, fell 0.38% for the quarter while gaining 16.00% for the year. On the fixed-income side, the Barclay’s U.S. Aggregate Bond Index rose 0.22%% for the quarter and 4.22% for the year.
 What’s the Impact to SEI’s Strategies?
     Our outlook for 2013 remains balanced and modestly positive. Markets have exhibited less of the wholesale risk-on, risk-off dynamic that has created so much volatility in recent years, which should be a positive sign for active management. Major central banks continue to support policies that promote economic recovery. Economic reports show that China’s economy appears to be moving in the right direction.
 
  Of course, Europe continues to struggle, and fixed-income markets may have reached an inflection point where they have little upside potential. We still see opportunities for active management in the fixed income markets but expect interest income rather than capital gains to drive returns. In this environment, we favor equities and expect the U.S. and Canada to outperform Europe.
 
SEI Outlook and Perspective
SEI’s manager selection and asset allocation approaches have fared well during the persistent cycle of slow economic growth that we have seen in recent years. With our outlook for continuation of similar conditions in 2013, we anticipate a favorable environment for security selection and active asset allocation while we continue to focus on the development of innovative solutions designed to help investors achieve their goals.
 Reducing Risk and Guaranteed Income
We continue to reduce risk by hedging with strategies such as the WEDCo. proprietary trend trading model.  This automated strategy monitors trends in market sectors and moves funds accordingly.  The goal is capital preservation for future income.  This WEDCo. model has, once again, beaten it’s benchmark, the Barclays Global Aggregate Bond Index, with a gain of 6.54% in 2012.  Since 1998 it has averaged 6.75% and had only 3 negative years with the greatest loss being 3.41%

 We continue to vet other guaranteed income sources for those planning on taking distributions from investments with in 2 to 10 years. Various contracts will likely be available in 2013 which offer life-time income based on guaranteed returns on investments of up to 6.5% per year.  Some will also increase income distributions in the event of long-term  illness, without prior medical underwriting.

 Tax Changes

See our website link for tax changes that may affect you in the years to come: http://www.stlaurentpro.com/latest-posts/higher-taxes-in-2013

 Should You Consider Owning Gold & Silver In Your Bank IRA?
Until now, you could not actually possess physical precious metals in your own local bank IRA. Through our first of it’s kind arrangement our custodian will randomly audit the bank of your choice to determine the safety and validity of your precious metals IRA in accordance with IRS standards: http://www.stlaurentpro.com/latest-posts/hold-gold-silver-in-your-local-bank-ira-with-our-unique-custodian/

 

 Real Estate

If you or anyone you know is considering selling or buying real estate please contact us.  We have many sources that offer unique and affordable options when you are not sure about your real estate or relocation plans.  More options are available to us than with traditional lending and real estate services.

 INSURANCE Is Something Most People Hate…….……until they need it.  Recent changes to the laws regulating insurance companies have made it critical for everyone to evaluate their insurance policies.  In some cases the new requirements have made rates more affordable and coverage easier to get. ough To be clear, although we can assist you with health insurance questions, we are referring to life, long-term care and disability policies, mostly.

 Please give me a call. We are always available to discuss any matter regarding any aspect of your life planning.  

 Sincerely,

 Richard St-Laurent, CWPP

The Barclays Capital Global Aggregate Bond Index (formerly Lehman Brothers Global Aggregate Index), an unmanaged market capitalization weighted benchmark, tracks the performance of investment grade fixed income securities denominated in 13 currencies. The index reflects reinvestment of all distributions and changes in market prices.

The Barclays Capital U.S. Aggregate Bond Index (formerly Lehman Brothers U.S. Aggregate Bond Index) is a benchmark index composed of U.S. securities in Treasury, Government-Related, Corporate, and Securitized sectors. It includes securities that are of investment-grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $250 million.

The MSCI All Country World Index is a market capitalization weighted index composed of over 2,000 companies, and is representative of the market structure of 48 developed and emerging market countries in North and South America, Europe, Africa, and the Pacific Rim. The index is calculated with net dividends reinvested in U.S. dollars.

The S&P 500 Index is a capitalization-weighted index made up of 500 widely held large-cap U.S. stocks in the Industrials, Transportation, Utilities and Financials sectors.