MORE HEADLINES
Economic Update
Recent economic data modestly improved.
Domestic Equity
The S&P 500 Index finished the year with positive returns in 9 of 12 months.
International Equity
International equity markets finished the year with exceptional performance.
Fixed Income
Credit spreads tightened further during the quarter.
Real Estate Securities
International real estate securities underperformed domestic REITs during the fourth quarter.
Hedge Funds
Hedge funds produced their largest annual gains in a decade.
MARKET REVIEW
What a difference a year makes. Last year at this time we wondered whether the U.S. was headed toward another Great Depression, whether the banks needed additional bailout funds, and whether consumers would continue to curtail their spending. The CBOE Volatility Index (VIX) peaked above 80 in late 2008, twice as high as the previous peak. Although the recession was the worst since the early 1980s, today we appear to be in the midst of an economic recovery, with positive GDP growth over the last half of 2009. The major banks did not fail, but rather, realized solid earnings, and are now being scrutinized for large executive bonuses. Perhaps due to government stimulus plans, like Cash for Clunkers, consumers cautiously began some spending again.
