The year finished on a strong note with the stock market gaining more than 10% during the fourth quarter and bringing full year results to a 32.4% gain, including dividends. While it was tough sledding for the BGEP on a relative basis for most of the year, we managed to just outpace the S&P 500’s return with a total year gain of 32.6%, net of fees.

The absolute returns for the portfolio have been strong for the last three years but have lagged the stock market as a whole. As Fed QE policy draws to a close, we believe stock price correlations should fall and individual stories begin to perform based on their own merits rather than the overall tide of easy monetary policy. Hopefully, this shift will usher in a period similar to our five year and since inception based returns, which continue to outpace the market as a whole.

The performance of various asset classes over a given year can sometimes provide a clue as to how an economy behaved over that year. For 2013, domestic stocks – large, small, growth and value – all posted gains of more than 30%! The story for the other major asset classes was different, however, with government bonds (10 Yr UST) falling 8% in value, commodities including gold declining in the double digits, and emerging market equities as a group off roughly 3%.

For details on our firm’s performance results, our investment outlook, and related disclosures, please read the attached Performance Review.