In the 1954 Alfred Hitchcock movie Rear Window, Jimmy Stewart plays a famous photographer laid up with a broken leg, aided by a visiting nurse named Stella, played by Thelma Ritter.  In a scene apropos of what we'll be hearing from a few stock market mavens in the coming weeks, Stella boasts to Stewart’s character, “You heard of that market crash in ’29?  I predicted that.”  To which Stewart’s character inquires curtly, “Oh, just how did you do that, Stella?”  “Oh, simple, explains Stella, “I was nursing a director of General Motors.  Kidney ailment, they said.  Nerves, I says. And I asked myself, “What’s General Motors got to be nervous about?”  Overproduction, I says; collapse.  When General Motors has to go to the bathroom ten times a day, the whole country’s ready to let go.”

With all the upheaval in the markets this past year, I wager no one could have predicted the year’s ending outcome.  The U.S. stock market rose, then swooned, then rose again.  Large cap growth stocks led the way, with more conservative (yet generally better performing over the long run) value stocks trailing.  Small cap stocks (with excellent long term historical performance) advanced, but at a much slower pace than their large cap brethren.  In the end, while the large cap-laden DOW Jones Industrial Average and the S&P 500 enjoyed historical highs, the overall domestic market struggled to reach double digits.

International markets and currencies really disappointed, delivering net losses on the year. Even non-traditional bond sectors that had performed impressively over the past couple years came under surprising attack. Human behavioral science can probably provide some explanation – but only in hindsight.

On the bright side, diversified portfolios did pretty much what they were supposed to do: they diversified. Not everything went up, and not everything went down. And, rebalancing opportunities enabled profits to be taken in the winners and bargains to be had in the losers.

As for predictions for the year ahead… Well, any insight you might care to share will be most warmly welcomed and appreciated – unless of course it's from a visiting nurse with inside information for which we might find ourselves prosecuted for insider trading!

All of us at the Wealth Conservatory wish you a happy 2015, and send out best wishes for a healthy, prosperous, and most importantly joy filled year ahead! We thank you for letting us be a part of it.