What kind of year was 2014? In financial markets, 2014 should go down as the year of the United States.

The Year of U.S. Markets: S&P 500 (IVV), Japan (EWJ), Europe (IEV), Emerging Markets (IEMG)

In a remarkable decoupling from the rest of the world, U.S. equities by far outperformed international equities. The U.S. (IVV, SPY) is the only market with a positive – and quite respectable – YTD return of 9.7% (as of Dec 15). On the other hand, global markets presented investors with losses. As if designed to make this point, most broad global index ETF returns clustered in a remarkably narrow -6% to -10% range (in USD terms, which is what matters for U.S. investors). Add Canada and Australia – still in the same range! Of course, “emerging markets” is a very broad category, in which some markets such as China (MCHI, +1.0%) are doing Ok, while Russia (ERUS, -51%) collapsed.

Model Capital Management LLC is a tactical investment manager. Please review the following pages for more information on Model Capital’s approach to tactical investment management and our tactical SMA strategies.