Summer Letter to Clients {Part IV}

Today is the 4th Installment of our summer letter to clients originally dated July 25th, 2014:

We included a chart from an excellent publication from JP Morgan.**  It shows annual returns of the S&P 500 {the bar lines in grey} and each year’s intra-year declines {the numbers in red}. The chart represents over 33 years of data.  I like this chart because it represents a long statistical fact set. There’s a long secular bull market in the 80’s and 90’s and two bear markets in the 2000’s {or one long period of stagnation during that decade if you prefer to view history that way}.  It shows inflationary periods as well as stagnant gains in prices.  The data covers six Presidents {three from each party}, wars, the end of the Cold War, a significant terrorist event in the United States and several change of control in the Congress.  It represents eras of wrenching change in the world as well as unthinkable inventions and innovations a few short years before this chart was started.  In short it represents a full spectrum of both good and bad times.  In the markets, it represents periods of both fear and greed. 

*Long ETFs related to the S&P 500 in client and personal accounts although these positions can change at any time.

**JP Morgan Asset Management, Guide to the Markets:  3Q | 2014.  This publication is updated quarterly and is full of useful charts and statistics.  The subjects covered include the economy, the stock and fixed income markets as well as international sectors and commodities.  You can access it at www.JPMorganfunds.com, go to “Insights” and then click on “Guide to the Markets”.