The market has not been this volatile in years. The intraday 1-2% moves occurring at a higher frequency tells us how skittish investors have become. As we said in December, Granite Group Advisors expected a pullback in January. As of this writing, the S&P’s return is a big fat ZERO.

In an environment such as this we favor different styles of dividend managers, as they will temper volatility. As for fixed income, we believe that shorter term bonds will not do well over the next few years. Additionally, we think absolute return hedge funds would be a good place to lower overall portfolio volatility.

In the short term, once again we would be cautious with new allocations. We are still moderately constructive of the markets for 2015 and continue to see mid to high single digit returns for 2015.

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