There was plenty of noise surrounding the financial markets in April. Some of the news brought markets to new highs while other stories gave investors reason to pause. Interestingly, after numerous intermonth gyrations, the market settled in very close to where the month began.

The continued geopolitical events and tensions in Ukraine added to global market volatility. First quarter corporate earnings produced mostly positive surprises with a few disappointments. Some companies were issued a bad weather pass and will need to prove the first quarter was an exception and not the rule. The economy tells us the U.S. consumer is strong, they are spending and confidence is high; employment is gradually improving, while the real estate market treads water. It also told us first quarter GDP was barely positive at 0.1% compared to the fourth quarter 2.6% growth rate. Is this a new trend or a weather related setback? We believe it is temporary and the second quarter will bounce back with stronger demand for goods and services.

The Fed’s message is: the economy is getting better and we are here to help. Janet Yellen calmed the markets with speeches highlighting Fed policies of measured tapering and accommodative monetary policies. The Fed announced their fourth monthly $10 billion cut to bond purchases, so the Taper remains as scheduled and the Fed is now purchasing bonds at the rate of $45 billion per month, down from $85 billion at year end. The target Fed Funds rate remains at zero.

Interest rates, much like our Minnesota lakes, are frozen in time. April began with the 2, 10 and 30-year U.S. Treasury yielding 0.44%, 2.73% and 3.56% respectively. These yields at month end were: 0.42%, 2.65%, and 3.46%. The bond market likes low inflation, slow economic growth and a consistent Federal Reserve and it continues to get all three. The Barclays U.S. Aggregate Bond Index returned 0.84 percent in April with long-term US Treasuries providing the best monthly return at 2.00 percent and intermediate Treasuries were the weakest contributor at 0.36 percent.

Equities bounced around throughout the month. While many of the major indices were little changed, there was a noticeable change in leadership within the indices. Recent growth and momentum stocks like Priceline, Amazon, and Netflix which moved higher like clockwork suddenly hit the wall. Investors rotated from the high fliers into value companies in the utility and energy sectors and other well-known blue chip dividend payers. This is reflected in the returns as the NASDAQ declined 1.96 percent and the MSCI EAFE Small Cap Index was down 0.81 percent. The S&P 500 returned 0.74 percent in April.

Commodity prices are off to a much better start this year and April added to the recent gains. Gold was basically unchanged with a -0.15 percent return in April and a basket of commodities measured by the Dow Jones UBS Commodity Index rose 2.44 percent for the month.

Investing requires patience. Sometimes we sit and watch the pot of water on the stove and wonder if it’s ever going to boil. April was much like that in the financial markets. The broad markets are relatively flat but below the surface there are subtle changes occurring. We still expect stocks to outperform bonds in 2014, but returns from both asset classes will likely be in single digit territory. The second quarter will confirm if the first quarter economic slowdown was weather induced or not. If the economy bounces back the stock markets will respond positively. If the economic activity remains slow expect more months like April in our future.

Whether you are a bull, bear, dove, hawk, day trader or investor; the first quarter gave you something to support your cause. For those open-minded investors, Mother Nature provided enough horrific winter weather to conclude this quarter’s economic numbers themselves may not even be relevant. Market volatility increased as geopolitical events surrounding Ukraine created short-term trading opportunities. Janet Yellen transitioned from Vice Chair to Chair of the Board of Governors of the U.S. Federal Reserve. The leadership change has been smooth and Fed policies of gradual tapering and accommodative monetary policies are continuing as expected.

The bottom line on first quarter data leaves us believing the recovery continues despite adverse weather conditions. The consumer, which represents 70% of the U.S. economy, is receiving modest income gains and their spending trends are positive. This is a key ingredient for current and future growth. Manufacturing reports have been mixed, but the weather may explain some of the slower regions. Spring will either give us an economic bounce back or confirm a slower pace of output. Housing sales have slipped but home prices continue to appreciate in value. A spring thaw will likely keep the economy on the road to recovery in the second quarter.

The markets digested all the information and provided investors with a reasonable quarterly return after coming off the best single year in this five year bull market run.

The biggest asset class surprise was the strength and stability of bond prices and interest rates. The policy continuity at the Federal Reserve helped keep short-term interest rates locked in at low levels and long-term interest rates declined slightly causing bond prices to appreciate. Slow but steady economic growth coupled with low inflation helped the longer end of the yield curve. The Barclays U.S. Aggregate Bond Index returned 1.84 percent in the quarter with long-term US Treasuries providing the best sector return at 7.10 percent and intermediate Treasuries were the weakest contributor at 0.65 percent.

Equities bounced back from a January correction to reach new all-time highs before quarter end. Solid quarterly earnings reports brought stock prices back from the January lows. Performance results were mixed but generally positive for the quarter. Returns ranged from -0.43 percent on the MSCI Emerging Market Index to 3.36 percent on the MSCI EAFE Small Cap Index. The S&P 500 returned 1.81 percent for the first quarter of 2014.

Market nervousness was reflected in strong quarterly commodity price action. Gold rallied 7.70 percent to start the year and a basket of commodities measured by the Dow Jones UBS Index rose 6.99 percent.

At year end, we expected 2014 to bring high single digit returns from the global stock markets and low single digit returns from the U.S. bond market. Our expectations have not changed so as we move through the second quarter and beyond, expect stocks to generate slightly higher returns and bonds slightly lower returns as compared to the first quarter results. The second quarter will confirm if the recent slower economic activity was weather induced or not. If we get an economic bounce back markets will respond positively. If the economy is slowing expect equities to oscillate based on the latest economic news and geopolitical events.

While the market’s short-term path is always uncertain, the path you chose for your portfolio is not. Rank the importance of your investment goals by three key factors: growth of principal, income generation, and preservation of principal. Verify that your portfolio is aligned with your long-term investment goals and objectives and let it work for you over the long haul.

Both life and investing requires balance. In life we seek to achieve a balance between diet and exercise, work and play, family and friends, and time and money. Successful long-term financial plans incorporate just the right blend of spending, savings, income, growth, risk, reward, safety, liquidity, stocks and bonds to create a sustainable lifestyle and a secure financial future.

After a year like 2013 one may question the need for a balanced investment approach, but January reminds us the road to wealth creation has a few potholes. After a bumpy month, the markets found themselves back on track in February. The bond market digested the second round of Federal Reserve tapering without a problem and traded in a very narrow range for the month. The stock market reversed course and recaptured January’s losses.

Stocks lead bonds in February while every asset class posted positive returns. For the month, the S&P 500 gained 4.57%, NASDAQ Composite 5.15% and the MSCI Europe, Africa, Far East (EAFE) 5.56%, MSCI Emerging Markets 3.31%. In the bond world, investment grade taxable bonds gained 0.53%, municipal bonds were up 1.17% and high yield bonds appreciated 2.02%. After a forgettable 2013, commodities rose 6.24% in February.

On the economic front, the U.S. continues to make progress toward a real recovery as the experts debate the economic impact of a harsh winter. Corporate earnings reported strong once again, new home sales improved, inflation and interest rates remain low, the consumer is still confident, while the employment picture is better, it is still unclear. The foreign markets always seem to provide cause for concern. This month it was slower economic growth in China and political instability in the Ukraine. It is truly global marketplace and international developments will impact the domestic economy and our personal portfolios.

As an individual investor it is paramount to build a balanced approach to long-term investing that reflects both your emotional and economic state. Whether your nest egg is $100,000 or $5,000,000 it is important to first establish your future income and liquidity needs. Once this piece of the plan is solved then you can begin building an emotionally free investment portfolio with the proper long-term focus.