Investment Management

Voya™ Investment Management was formerly ING U.S. Investment Management

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Are gold and silver prices going to continue to increase?

The trend on gold and silver are negative. The metals climbed on the fears of Fed tapering and the commensurate hit to selected emerging market currency and stock markets. Gold in particular has been a fear trade, alternate reserve currency and a hedge against inflation and deflation. In other words the expectations are unreasonably high and I expect that it will continue to lose its luster until it gets to a more sustainable level. Our forecast for gold in 2014 is $999.

In past decades, when the US economy was growing, in how many of those years was the S&P 500 Index up, and in how many was it down? In other words, what is the probability that the stock market will be up in 2014?

The market is driven by fundamentals – namely corporate earnings. Yes it is great to have a favorable economic backdrop for companies to make money but U.S. companies have shown they can increase profits even in a slow growth economy. Earnings in 2013 reached the highest level ever despite economic growth of about 2.5%. Based on the current earnings season and the projections for earnings in 2014 I would say the chances of the market going up a pretty good.

You constantly drill that fundamentals drive everything. With earnings being up and the Fed Tapering, how does this affect the fundamentals of sticking with a portion of a portfolio staying in bonds?

I think January is a terrific example of why you always want bonds. Long US Treasury bonds returned 6% while equities across the board were negative. Bonds offer diversification and risk control. The fundamentals – earnings - are coming in better than expected. I expect 2014 to be the highest level of corporate earnings ever and I anticipate the market will go up. However, the path up is not always straight and there will be more market volatility as the Fed hands the reigns back over to the market. Global Perspectives advocates a broadly diversified portfolio of both stocks and bonds.

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