would like to thank all our clients and friends of the firm for a terrific
year. For now, the economic and political climate looks favorable. We have
developed a piece detailing our 2014 Outlook, which is available on the web
at ljpr.com/outlook. In it, you'll find an
overview of our perspective on the economic, investment, tax and estate
planning issues of the New Year. In general, we are cautiously optimistic,
and as the Outlook covers, we are revising our models to reflect what we
see as a new phase of the cycle. We have new funds and new ideas to
had a variety of events that we would not have expected, and some we did:
Washington operated in
the most dysfunctional fashion since 1900 and as a result, the deficit
was reduced by over $500 billion.
The Sequester did not
cause planes to plunge, or cows to give green milk.
The budget showdown
caused the government to shut down, which caused a variety of problems
for folks who didn't need it.
The Health Care rollout
went poorly, surprising everyone that the government jumping into high
technology might have snafus. It is interesting that the contractor,
CGI Federal is a Canadian company (French Canadian, zut alors).
So we had the US government trying to build a website using a Canadian
company to implement an exceedingly complex health care decision to
allow people who can't get health insurance to go on a computer and
sign up. Now why didn't that work?
On the other hand,
Kentucky had a tremendously successful health exchange that worked
swimmingly. Maybe working on it and testing it for over two years
We had a terrorist
attack on US soil, not from Al Qaeda, but from two young disgruntled
men from Chechnya. Scary, but interesting that the amount of
technology that surrounds us is amazing. There were pictures of the
perpetrators within hours.
Speaking of technology,
Target had 40 million customers "targeted", whose
credit/debit accounts were compromised from in-store transactions.
Stores were then overwhelmed with cash, which baffled clerks who
couldn't make change.
Detroit filed for
bankruptcy, now bringing a huge question of whether a Federal
Bankruptcy judge can trump the Michigan Constitution (which I think
will go to the Supremes). It also presents a strange argument that the
biggest creditor of Detroit is the retirees, and the biggest asset (by
the Judge's position) is the retiree's pension.
demonstrated his vast leadership qualities (?) by helping broker peace
accords with Iran and Syria.
The North Korean leader,
Kim Jong-un, provided a new meaning to the phrase 'termination with
extreme prejudice' as it applied to his uncle and all his aides.
The Fed began its
long-awaited "taper". In July, when the Fed Chair gave an
example of tapering, stocks and bonds took a dive. When the taper
actually started, the market soared. Go figure.
So, we couldn't make this stuff up, but after all of this, US equities had a banner year. Perhaps we should predict doom and gloom for 2014, but our outlook is actually simple: we expect the economy to continue to grow, the taper will continue, interest rates will likely rise, emerging markets will grow, and the media will be inundated with political campaign ads.
about 2014? Here's a foreshadowing of what we expect:
As a result of our
client survey, we are providing a variety of client enhancements.
We have revised our
investment models to include some new low-cost funds and to reflect
our view on a rising rate environment (more in the Outlook). Expect this early in 2014.
Financial planning will
have to take into account changes in the health care situation.
We will be providing a
series of educational programs for clients and friends throughout the
We will be leveraging
technology to do out-of-office meetings (such as Skype).
We are engaged in a very
exciting project called the Michigan Alpha Project (MAP). The MAP
is a collaboration of Walsh College and LJPR to provide a real-time,
real money portfolio in one of North America's best markets: Michigan.
We will be posting more on this later.
in all, we see some challenges for 2014, but proper positioning and
diligence in planning will provide the opportunity for a solid year. As
always, we'll be on the lookout for potential problems as well as
wish you all a very Happy New Year. In closing, we'd like to offer a New
Year's wish: Go Green, Go White! For the rest of 2014: may you have a year
of good health, happiness and prosperity.
If you get mad at my jab on Canadian software companies, recognize that
'LaBrecque' is French Canadian. I was just trying to name some great French
Canadian software companies that I can think of, or any big French Canadian
companies, for that matter...