THIS ISSUE

  • A Year to Remember: 2013 Recap and 2014 Outlook
  • U.S. Economy Gaining Altitude as 2014 Begins
  • Fixed Income: 2013 Review and the Landscape Ahead
  • Selectivity Was Key to 2013 Fixed Income Returns
  • Market Overcomes Worries to Post Strong Gains

2013 was quite a remarkable year. Equities had an essentially uninterrupted advance, with the major averages climbing steadily and producing an overall gain for the market of more than 30%, as measured by the S&P 500. Outgoing Fed Chairman Ben Bernanke raised the tapering flag in May but then held back while investors got accustomed to the idea of less central bank stimulus. As the year wound down, we saw a pullback in bond purchases just before his successor, Janet Yellen, became chair.

Bernanke’s initial tapering announcement drove rates higher, depressing bonds and other income-oriented assets as well as emerging market stocks. Although rates finished the year well above their starting point, neither the economy nor the markets were significantly disrupted. Despite the overall slow pace of the U.S. recovery, key sectors of the economy — housing, energy, and manufacturing among them — are growing stronger. Meanwhile, consumer confidence is rising, the jobless rate is falling — as is the federal deficit — and Washington hasn’t inflicted any new wounds on the business community for a while. While it’s unlikely that 2014 will see a repeat performance from the S&P 500, it should be a good year for equities and certain other assets. Selectivity will be critical, as the Fed has entered the wind-down phase of a monetary expansion unlike any we have seen before.

This issue provides insights from City National Rochdale’s team of investment professionals on the outlook for equities, fixed income, and the economy — along with a review of our key investment themes for 2014. I am confident you will find it informative.

Our relationship with you is very important to us. If there is something you would like to discuss, please contact your advisor or portfolio manager. If I can be of assistance to you, please contact me directly at garrett.dalessandro@cnr.com.

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The information presented does not involve the rendering of personalized investment, financial, legal or tax advice. This presentation is not an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned herein. The content presented is based upon information received from sources City National Rochdale considers reliable. Certain information has been provided by third-party sources and, although believed to be reliable, it has not been independently verified, and its accuracy or completeness cannot be guaranteed. Any opinions, projections, forecasts and forward-looking statements presented herein are valid on as of the date of this document and are subject to change.