North American stocks gained last year. But you need to keep clients’ expectations in check, suggests an Edward Jones report.
That’s because markets may be unsteady throughout 2014. The report finds:
- returns will be positive but moderate over the next year;
- there will be more volatility in the markets and there may be short-term dips; and
- bond returns will continue to fall as interest rate rise.
Still, you can help investors find international opportunities since global growth is expected to improve. That trend will also boost “sustained corporate earnings growth (the foundation for long-term market performance), [as well as] consumer and investor confidence,” says the report.
Read: A third dimension of risk
If clients have bonds, adds the report, prepare them for the year ahead. Average annual returns were 6.4%, on average, from 2008 to 2012, but they’ll soon drop.
Read: A progressive approach to fixed income
Read more on how to help clients set market expectations.
Also check out:
Help clients boost bond portfolios
When home and hot biases collide
Investors worldwide are more optimistic
What to do with unexpected assets