As we reflect on a great 2014 and look ahead to 2015, we are first and foremost grateful for the opportunity to serve you and to support your family and businesses.  Our goal is to help equip you to be an excellent steward of your financial resources and we strive to be diligent, alert, and creative in our efforts to serve you. We look forward to 2015 and the opportunities that lie ahead.

Celebrating 2014 while focusing on strategic planning for 2015…

2014 was an interesting year. While the record books show another solid year for U.S. equities with the S&P up 13.7%, the year was far choppier than that sound bite would lead you to believe. First, we experienced a return of volatility,  including the first 10% decline in three years.  Additionally, we experienced a divergence in performance among asset classes as U.S. large-cap stocks (e.g. S&P 500) significantly outperformed U.S. small-cap, international stocks, emerging markets, and commodities. Then recently we have seen sharp declines in the price of oil continuing into early 2015, which has added to the volatility in certain segments of the market. With all these dynamics, there is a temptation to chase the better recent performance and move our asset allocations exclusively to the S&P 500. These same temptations presented by media pundits would have led us out of the S&P 500 and intermediate bond market last year at this time, which is why it’s so important to have a long-term strategy.

Diversification is more important than ever…

Diversification can be frustrating at times because your performance may fall short of the best performing asset class. While most people understand the merits, it can be tempting to abandon it at just the wrong time. As investors we often have short memories, and it’s easy to forget there have been extended periods of time when other asset classes have outperformed U.S. large-cap stocks. For example from 2002-2007, international stocks averaged  14.3% per year, significantly outperforming the 6.3% average for U.S. stocks (S&P 500). Further, for the 14 year period ending in 1979, Treasury Bills outperformed the S&P 500 with an average annual return of 6.0% vs. 5.1%. Though the temptations of market timing strategies are always present, based on the actual data, maintaining a diversified allocation customized to your specific goals provides the best opportunity for success.

And finally…Welcome Jeremy Thames!

Please join us in welcoming Jeremy Thames to E|Financial Alliance as an intern this spring.  Jeremy is an undergraduate Vanderbilt University where is he on the Board of the Investment Club and already has an impressive resume with stints at Harris & Associates in Chicago as well as an Investment Advisory firm near Dallas.  We are excited have him join the team promise not to work him too hard!

At E|Financial Alliance our mission is to help to give you peace and comfort with a plan for success – thank you for allowing us to partner with you.

Mitch & Destin