Market Commentary 
 July was a weak month across the globe, with most major markets generating negative results. In developed economies, equity performance was dictated by market capitalization, with large caps returning -1 to -2%, mid caps -3%, and small caps -6%. The lone bright spot was emerging market equities, which returned 1.9% on an expansion in Chinese manufacturing orders. European investors sought safety in German bunds on the news of a Portugese bank defaulting on its debt obligations and further tensions in Ukraine and the Middle East. The 10yr U.S. Treasury was largely unchanged for the month, while high yield experienced losses as $5.4 billion was redeemed from non-investment grade ETFs and funds. 

You probably didn't notice, but when the clock struck midnight on December 31, 2013, a number of popular tax benefits, commonly included in the list of provisions referred to as "tax extenders" expired. While it's possible that Congress could retroactively extend some or all of these items, you'll have to evaluate your 2014 tax situation based on the fact that they're no longer available.

One thing that stands out about the past quarter amidst the record-setting highs of the S&P 500 is the very low stock market volatility. By late June (6/19/14), the VIX, a volatility index that measures expected 30-day volatility of the S&P 500, had dropped to 10.6, a level last seen in February 2007.

While low volatility and high stock prices reflect the market’s apparent lack of concern about risk—likely buttressed by a belief that the Federal Reserve will continue to support financial markets with accommodative monetary policy—this seeming complacency is causing us some near-term concern because it suggests a market more vulnerable to negative surprises.