Q1 2012 Client Letter
In what is somewhat of a surprise following last year’s incredibly volatile market, the start of 2012 has been encouragingly positive and calm. The first quarter closed with gains in equity markets both at home and abroad. In the U.S. the S&P 500 Index and the Dow Jones Industrial Index rose by 12.6% and 8.8% respectively. The international markets also provided strong first quarter returns of 11.0% and 14.1% for MSCI EAFE and Emerging Markets Indexes. In addition, equity market volatility, as measured by the VIX Index, declined almost 34% in the quarter back to a normal level of 15%. In contrast the Barclays Aggregate US Bond Index was up a mere .30%. So, what is so different about 2012 and why has market sentiment changed so quickly?