Following a very strong 2013, the first quarter of 2014 has
\nseen much more subdued equity market returns. Where
\n2013 had several major U.S. stock market indexes generate
\ntotal returns in excess of 30% with low levels of volatility,
\n2014 has produced negligible changes for many of
\nthose indices.<\/p>\n
Given that we have recently celebrated the fifth anniversary
\nof the bull market for stocks that began on March 6, 2009,
\nwe are not surprised to see the market become more
\nchallenging. There are very few bull markets that endure
\nfor five years and fewer still that have lasted for six years.<\/p>\n
The trend towards a more selective market has continued
\nto play out in 2014 as the importance of stock picking in
\ngenerating competitive returns has made itself increasingly
\nevident. Following a strong year, it is not surprising to see
\nthe stock market go through a period of digestion.<\/p>\n
It is hard to gauge the strength of the broad U.S. economy
\nduring the quarter because the unusually cold weather
\nhad an atypical impact on so much of the country. We
\nbelieve that the economy remains in a slow growth mode,
\ndomestically as well as overseas.<\/p>\n
We saw several large merger and acquisition (M&A)[[Merger and acquisition (M&A) is a general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company,
\nwhile an acquisition is the purchase of one company by another in which no new company is formed.]]\n
transactions last year, and the trend has continued in the
\nfirst quarter. Looking ahead, we continue to expect the M&A
\nenvironment to be robust as companies starved for growth
\nseek to find it through accretive acquisitions. Although
\ninterest rates remain at historically low levels, cues from
\nthe Federal Reserve (Fed)[[The Federal Reserve Board (\u201cFed\u201d) is responsible for the formulation of U.S. policies designed to promote economic growth, full employment, stable prices, and a sustainable
\npattern of international trade and payments.]]\n about a rising rate environment
\nmay be helping to pull forward deals. <\/p>\n
As we noted at the end of last year, we remain very
\nhigh active share[[Active share reflects the percent of a portfolio that differs from the index.]]\n managers. Because of our bottom-up,
\nfundamental-driven stock selection process, our portfolios
\ntend to look very different than the benchmark index.
\nOur goal is, as it always has been, to invest where we find
\nearnings and cash flow growth, good management teams
\nand solid balance sheets.<\/p>\n
We are not surprised to see the market become more challenging.The trend towards a more selective market has continued to play out. We continue to expect the M&A environment to be robust…<\/p>\n","protected":false},"author":1,"featured_media":34399,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1483],"tags":[1663,1655,1888,1651,1437,2087,2068,2054],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/34401"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=34401"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/34401\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/34399"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=34401"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=34401"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=34401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}