2016 finished with a bang, didn't it? The markets had worsened to the point of entering a bear market condition going into the election. At 11pm, the market futures were even indicating a drop of 800 points at the open....and then the unexpected happened!
Up until Nov 10th, the average small-cap stock had dropped over 20% from it's high the of May 2015, and following suit was the mid-cap and large cap stocks as well. We were experiencing a VERY choppy and mundane year with no end in sight. The best performing assets were bonds, utilities, and gold heading into the election foreboding a rather difficult and miserable 2017 with the Fed raising rates and a continued darkening market condition.
The Trump Jump, as the pundits are now referring to it, has been quite impressive to witness. A renewed interest in the markets has caused a reversal of fortune for many. Much of today's move upward has been embellished by the cabinet of President Trump more so than the candidate himself.
With his present cabinet picks on board with more of the selection process remaining, we are seeing signs of potential deregulation, improvement of US economic strength, rally in the dollar, and reductions in deficit spending-all of which I am sure will be debated by a great many MUCH more intelligent than I. All I know at this point is the conditions are warranting a realignment of investment strategy and a renewed caution as this market continues to rally and rise, so in tune with the inherent risks associated with it.
We are 7 years into a historical 4-year bull rally, which at some point will decide to reverse trend, but until such time, we remain committed to seizing advantage of the market conditions on behalf of clients.
Till we speak again, stay warm and committed to your New Year's resolutions!
Special Update: 2016 in Review
WEEKLY UPDATE - JANUARY 3, 2017
Looking back on the final trading week of a very eventful year, we saw low volume and a break from the recent rallies for domestic indexes. While international stocks in the MSCI EAFE added 0.56%, all major U.S. indexes declined. The S&P 500 lost 1.10%, the Dow was down 0.86%, and the NASDAQ gave back 1.46%. For the first time since November 4, the indexes posted three straight days of losses. Despite these last-minute decreases, 2016 ended very differently than it began.
Last January, domestic indexes rang in the New Year with quite unpleasant performances. While the S&P 500 and NASDAQ dropped, the Dow experienced its worst-ever five-day start to a year, losing 1079 points on fears of an economic slowdown in China and plummeting oil prices.
By market close on December 30, 2016, all three indexes showed healthy growth for the year:
- S&P 500: Up 9.5%
- Dow: Up 13.4%
- NASDAQ: Up 7.5%
In addition to this equity growth, last week showed us a number of encouraging economic indicators for 2016, including:
Consumer Confidence Surge: On December 27, Consumer Confidence beat expectations to reach 113.7 - a 13-year high. This metric indicates that consumers feel more positively about jobs, personal finances, business conditions, and more.
U.S. Dollar Increase: The dollar was up for the fourth straight year, showing a 3.7% increase for 2016 after hitting a 14-year high on December 20.
Crude Oil Recovery: After a rough start to the year, oil experienced its largest annual increase since 2009. In fact, three-dozen U.S. gas and oil producers in the S&P energy index gained more than 40% during 2016.
We all know that 2016 brought its fair share of surprises - from victories for Brexit and Donald Trump to our recent stock market rally and beyond. However, the year ended with domestic indexes up and a number of positive economic indicators. As we look toward 2017, we see opportunities for continued growth, as well as many questions that no one can yet answer.
- Will President Trump reduce regulation and taxes?
- Will OPEC keep its pledge to lower oil output?
- How will China's economy perform?
- Could more "Brexits" be on the horizon?
The questions remain, but no matter the answers, we are here to help guide you through the year - and toward your goals - with proactive, strategic support. If you want to talk about what we experienced in 2016, or what we anticipate for the year ahead, we are always here for you.
Monday: Markets Closed in Observance of New Year's Day
Tuesday: PMI Manufacturing Index, ISM Manufacturing Index, Construction Spending
Wednesday: ADP Employment Report
Thursday: PMI Services Index, ISM Non-Manufacturing Index
Friday: Employment Situation, International Trade, Factory Orders
Beware of IRS Impersonations and Scams
With tax-filing season coming up, IRS impersonations and scams are upon us, too. If you receive a phone call, email, or text saying that the IRS is "threatening you with lawsuits or jail unless you pay immediately," this communication is a scam.
Here is a reminder of common ways criminals may scam you, by using actions that the IRS will never take:
- Contact you via emails, texts, or social media channels
- Call you to demand an immediate payment
- Call you about your taxes without first mailing you a bill
- Demand that you pay taxes without the opportunity for you to question or appeal the amount you owe
- Require you to pay your taxes through a specific method, such as prepaid debit cards
- Ask for your credit card numbers over the phone
- Threaten to arrest you through local police or other law-enforcement groups for not paying
You can report a potential scam to the federal government in two ways:
- Contact the Treasurer Inspector General for Tax Administration (TIGTA): Use the "IRS Impersonation Scam Reporting"web page. You can also call 800-366-4484.
- Report to the Federal Trade Commission: Use the "FTC Complaint Assistant" on FTC.gov, and add "IRS Telephone Scam" in the notes.
Tip courtesy of IRS.gov
Manage Your Big Slices with Racket Science
A very common challenge many golfers have is slicing the golf ball to the right, which makes them lose distance and accuracy. To compensate, golfers usually do an "over the top move" by bringing their hands, arms, and elbows far away from their body on the downswing and then swinging their club too far left on follow-through. With this move, you only succeed in making even bigger slices.
You can see if your technique is off by checking your tennis swing. In tennis, people often try to hit the ball over the net by extending their elbow too far away from their body. Grab a tennis racket and ball, and practice your swing to see where you point your elbow. With an accurate stroke, you should point your elbow down and keep it close to your side when you hit the ball. In this stance, you can add more power and control by rotating your body rather than flaring out your arm.
And the same technique applies when managing your slices in golf. If you practice your tennis swing and notice your elbow outward, grab a golf club and do the following:
- Place the club in your dominant hand.
- Hold the club a little above the ground.
- Imagine a ball coming at you (like tennis) and hit a forehand.
- Do this motion multiple times until you feel instincts take over and hit like you're using a hard forehand.
After repeating this drill, you should feel your elbow pointed downward on the downswing. Remember: To play well, you must use your whole body - not just your arms. Practicing this stroke will help you bring your whole body into play and avoid a big slice.
Tip courtesy of Boyd Summerhays | Golf Tips Mag
Maximize the Health Benefits of Garlic
Garlic is not only a great flavor to use when cooking - it also has a host of health benefits. From helping to treat high blood pressure to calming earaches and more, studies show that garlic can do a lot more for you than just making your next batch of pesto more delicious. Most of garlic's health benefits are due to the compound allicin, which activates once crushed and is garlic's defense mechanism to being "attacked." To make sure you maximize the health benefits, let your crushed or chopped garlic sit out for at least 10 minutes before cooking with it.
Tip courtesy of WebMD
Enrich Your Soil by Composting
Nutrient-rich compost is nature's homemade fertilizer. Your daily cooking and yard chores can help you create a powerful compost that your gardens will love. With these simple steps, you can start your own composting, but just keep in mind that you'll probably need a full year before your compost is ready to use.
To get started:
- Choose Your Container: Begin your compost by deciding how you want to manage the pile. A sealed composting bin with a front door will lay on the ground and require full manual mixing. A composting barrel will be on a stand and allow you to turn a crank and tumble it. A traditional composting heap requires an open-air structure to contain the matter and manual mixing.
- Start Piling: All vegetable and fruit scraps can go into a compost (as well as coffee grounds), and you can also include paper, newspapers, small sticks, grass clippings, and straw. Do not, however, include meat or dairy products. If you are doing an organic compost, only use food labeled organic so you don't introduce unwanted chemicals into the compost.
- Use the Right Ratio: A healthy compost maintains the right carbon-to-nitrogen ratio. To produce fertile, aromatic compost, make sure you have approximately 25- to 30-parts carbon to one-part nitrogen. If your compost is too smelly, you may have too much nitrogen. If your compost decomposition slows down, you may have too much carbon. You can research which food items to add to your compost that are high in nitrogen (such as coffee grounds) or high in carbon (such as carrots) and will help you bring your levels back to normal.
- Stir Regularly: Compost needs mixing every few days in order to aerate the soil and speed up decomposition. Use a garden fork to mix if you use a traditional compost or bin. Turn the crank to mix the compost if you use a barrel.
- Keep It Warm: Composts need warmth for the matter to break down, and the ideal temperature is between 140° and 160°Fahrenheit. This need for heat is why many bins are black - so they can absorb sunlight. If you have a heap instead of a container, be sure to cover your compost with a black tarp in colder weather.
You'll know your compost is ready by how it looks: When the matter is broken down and has the appearance of rich, healthy soil, it's ready to use. Happy composting!
Tip courtesy of Today
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia and Southeast Asia.
The S&P U.S. Investment Grade Corporate Bond Index contains U.S.- and foreign-issued investment-grade corporate bonds denominated in U.S. dollars.
The SPUSCIG launched on April 09, 2013. All information for an index prior to its Launch Date is back-tested, based on the methodology that was in effect on the Launch Date. Back-tested performance, which is hypothetical and not actual performance, is subject to inherent limitations because it reflects application of an Index methodology and selection of index constituents in hindsight. No theoretical approach can take into account all of the factors in the markets in general and the impact of decisions that might have been made during the actual operation of an index. Actual returns may differ from, and be lower than, back-tested returns.
The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.
By clicking on these links, you will leave our server, as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.