The Asian Financial crisis of 1997 – 1998 helped to cause some extraordinary volatility in the US markets in 1997 and 1998.  Here is a look at price movements on the S&P:

2/18/97-4/1/97                 – 9.6%

8/6/97-8/29/97                 – 6.3%

10/7/97-10/27/97             -10.8%

12/5/97-12/24/97             – 5.48%

1/5/98-1/9/98                    – 5.05%

7/17/98-10/8/98                -19.0%

Surprisingly, the stock market’s return for the two years 1997 – 1998 were very attractive, even with the above volatility:

1997 S&P 500 (including dividends)  +33%

1998 S&P 500 (including dividends) +28%

Bottom Line
Based upon what we know at this time, we recommend you “Stay the Course”.  We may see additional volatility in 2014.  Although unnerving and panic creating, it is important to keep our investment disciplines and review past episodes to ease your concerns.  We note that economic indicators across the developed world continue to show improvement.  As graded below, the U.S. consumer is spending a healthy amount, the FED continues to be accommodative, and corporate earnings remain strong which should support continued increases in the US stock markets for the long run.  Our investment models are more heavily weighted toward developed economies which arguably have preferable risk/reward characteristics vs. that of emerging economies.