2013 was a fabulous year for the asset class. Not so much for normal people. by @DavidOAtkins

The stock market was unstoppable in 2013.
A U.S. government shutdown, fear of a default, the threat of military action in Syria, big budget cuts, a European country looking for a bailout - any number of events might have derailed the stock market. But they didn't.

And if skittish investors had jumped out of stocks, they lost out.

The year "2013 would have been a good year to wear noise-canceling headphones," said Dean Junkans, chief investment officer for Wells Fargo Private Bank. "There were a lot of things that happened, and the market kept moving higher."

The Standard & Poor's 500 had its best year since 1997, gaining 29.6 percent. The Dow Jones industrial average gained 26.5 percent, its best annual gain since 1995.
Instead of worrying about the wider world, investors focused on the Federal Reserve and the outlook for its stimulus program.

The Fed bought $85 billion in government bonds each month in 2013. The purchases were designed to hold down long-term borrowing rates and encourage spending and investment. The stimulus also prodded investors to move from low-yielding bonds to stocks.

Median household income has begun to recover over the last two years, but households still have not come close to regaining the purchasing power they had before the financial crisis began, a new study says.

The study, issued on Wednesday by two former Census Bureau officials, suggests why many people remain glum even though the economy is growing and unemployment has declined.

Although median annual household income rose to $52,100 in June, from its recent inflation-adjusted trough of $50,700 in August 2011, it remained $2,400 lower — a 4.4 percent decline — than in June 2009, when the recession ended. This drop, combined with the 1.8 percent decline that occurred during the recession, leaves median household income 6.1 percent — or $3,400 — below its level in December 2007, when the economic slump began.

Since the end of the recession, the study said, household income has declined for all but a few population groups. Some of the largest percentage declines occurred for groups whose income was already well below the median, like African-Americans, Southerners, people who did not attend college, and households headed by people under age 25.