This marks the last issue of Computerized Investing for 2014, in what has been an action-packed year for CI and the markets. In March, we shifted to a monthly, digital-only format and the response to our more frequent publishing schedule and broader content has been overwhelmingly positive. In June we saw the addition of a new assistant financial analyst, Hareesh Jayanthi, whose review of the newest edition of Quicken is available here. In August, CI took the reins of AAII’s annual Best of the Web guide, turning it into a bimonthly feature that highlights the top picks in a variety of investment analysis, research and tracking categories. This month we offer our favorites for Consensus Analyst Estimates, Ratings & Recommendations, Stock Screening and Stock Valuation. Then, in November, we promoted our long-time intern-turned-research-assistant, Jackie McClellan, to a full-time assistant financial analyst. Jackie has contributed several articles in the past, most recently a Spreadsheet Corner article on using Google Sheets to create a portfolio tracker. She also just sat for the CFA Level I exam the first weekend of December and is anxiously awaiting her results! With this expanded staff, we look forward to offering you even more timely, meaningful and useful content in 2015 and beyond.

Year in Review

Looking back on 2014, it has been an interesting year in the stock market. The Dow Jones industrial average has notched 34 record closes year-to-date, while the S&P 500 index has recorded 49. The NASDAQ Composite has also reached 14-year highs, although it is still some 10% below its all-time high set back on March 10, 2010. Through the end of November, the S&P 500 is up 11.9% for the year. While off the torrid pace it set in 2013, I doubt many investors would complain about such returns year in and year out. The Grinch has seemingly stolen the hoped-for Santa rally, as slumping oil prices are starting to weigh on global markets. However, as of the close on Monday, December 15, the S&P 500 was only 4.1% off its all-time high recorded on December 5.

Whenever the markets start to swoon these days, many are quick to write off the bull market, which has been going for over five years. While I am not a market timer, there are some signs that the nearly six-year-old bull market may be running out of steam. Renewed worries about the strength of the Chinese and Eurozone economies have been weighing on U.S. stocks in recent weeks. Furthermore, it is too soon to tell the lasting impact of the Federal Reserve closing its quantitative easing spigot. Lastly, even though most economists expect (sometime next year) the first interest rate hike in more than eight years to be more symbolic than substantive, no one knows how investors will react once that first increase becomes a reality. Lastly, large-cap growth stocks dominated this year, which is common at the tail end of a bull market. The S&P 500 Growth index has experienced a total return of 16.0% through the end of November, compared to an 11.9% total return by the S&P 500 Value index. While the S&P 500 is up 11.9% through November 28, the S&P 400 Midcap index has risen 7.5% and the S&P 600 Smallcap index is up only 1.7%. A year ago, the tables were turned, as the S&P 600 outperformed its mid-cap and large-cap counterparts.

Arguably, one of the biggest newsmakers of 2014 was the Federal Reserve. Janet Yellen made history in January when she succeeded Ben Bernanke as head of the central bank. Yellen took over as the Fed navigated a post-Great-Recession environment, where the U.S. labor market was on pace for its best year since 1999 with the U.S. economy gaining steam. Currently the U.S. unemployment rate stands at 5.8%, compared to 7.0% last November. As a result, the Federal Reserve officially ended quantitative easing in October. The asset-purchase program has added $1.66 trillion to its balance sheet and has been credited with fueling the rebound in stocks since the March 2009 market bottom. The question now becomes when, not if, the Fed will start raising interest rates from their historic lows. Perhaps the two most closely watched words in economics these days are “considerable time”—how long the central bank has pledged to keep interest rates low. By the time you are reading this, the Federal Open Market Committee will have concluded its December meeting and it will be interesting to see if this language remains. If so, most believe that an interest rate hike will not come before the middle of 2015. If there is a language change, this will be a signal from the Fed that interest rate increases may be coming sooner than expected. The one wild card the Fed is facing is inflation. The bank has set a 2% target inflation rate, but oil prices at five-year lows have, thus far, kept inflation in check.

Tech IPOs (initial public offerings) also dominated in 2014. In September, Alibaba Group Holding Ltd. (BABA) set an all-time record by raising roughly $25 billion with its initial public offering. According to Schaeffer Research, tech firms have raised nearly $39 billion this year.

As many of you are reading this, I will be riding the rails back to Michigan to spend Christmas with my family. No matter if your holiday travels take you near or far, may the season be filled with friendship, health and happiness. Have a prosperous New Year!