Broker Check

Mid-Year Investment Review

| July 31, 2014
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The global economy has slowly, but steadily, continued to show improvement in the first half of 2014.  As such, following a prior year where stock prices increased at a faster pace than economic news may have dictated, the fundamentals for stocks as a whole are catching up to expectations.  This supports our May blog post which asserted that 2014 will be another positive year for the markets.  Thus far this year, we have maintained our large-cap dividend stocks that have created value for shareholders through dividend increases and share buybacks.  We have also used the recent highs to reduce our exposure to riskier investments.  For example, allocation to small-cap stocks was also pared down earlier in the year, prior to being down as much as 9% from highs.  Historically, late-July and August are normally a slow and digestive period for the markets. In addition, with the potential of the mid-term election correction still out there, profit taking and option protection has given us some cash to take advantage of any restorative pull backs.  We still anticipate a strong end of the year.

Foreign markets have showed signs of slowing, but this will most likely be temporary and the recovery abroad will continue.  Eurozone economic data presented declines in industrial production and business confidence.  The Ukraine crisis may be one of the factors damaging business confidence, as, according to Reuters, over 6,000 German companies are active in Russia.  In addition, growth may remain subdued in the near-term due to a World Cup related slowdown and the European summer holiday season.  Over in Japan, the economy slowed in the second quarter due to after-effects of a significant 3% sales tax increase, while an additional 2% increase is expected next year.  Meanwhile, China, the world’s second largest economy, is in the midst of a comprehensive reform plan that is increasing short-term volatility but may lead to higher-quality and more sustainable long-term growth.  While these nations present higher risk in the near-term, lower valuations and accommodative policies may allow for patient investors to reap the rewards of recovery.

Any near-term correction would be healthy for the stock market.  As such, we are keeping a close eye on stocks to add during any pull backs.  However, with low interest rates and low inflation, the economy should continue to strengthen.  Since recession risk is very low, we feel that the improving economy will support stock prices by the end of 2014.  We would like to take this opportunity to wish everyone an enjoyable and safe summer.


Tellone Financial Services is extremely pleased with the overwhelmingly positive feedback from clients regarding the new Tellone Management Group Client Portal.  Those that have signed up have cited its ease of quickly identifying useful information regarding their accounts.  Furthermore, the secure nature of the portal has been a major relief for many clients.  If you have not yet signed up for Tellone Management Group Client Portal access, please go to to read more and complete the Client Portal Authorization Form.

We have implemented our high-powered software for rebalancing your portfolios and our new Client Relationship Management software.  In order to best serve you, we would like to best know your particular communication preferences and gather more robust contact data.  We will be reaching out to you soon to update and verify your client profile records, such as addresses, emails, phone numbers, beneficiaries, etc.  All of these improvements are meant to keep your total financial house in order.

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