THE FOLLOWING IS REPEATED FROM LAST WEEK FOR
EMPHASIS: 

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.