I hope this finds you and your family well and that you had a wonderful holiday and New Year. 2016 was an amazing year. We lost David Bowie, Prince, and Carrie Fisher of Stars Wars fame to mention a few losses. I think the biggest event is our president elect Donald Trump. This surprised a lot of people. A lot of the press and the pollsters are still in shock. This election and it causes will be studied for years.
Another year has passed and again the markets were kind to us. This was after February when the DOW average was trading at 15,451 down from 17,405 open in January. Many thought it looked over valued and a lot of people were thinking it’s time to get out. Staying the course was the thing to do and we did. The effect of the election has been astounding, with what I will call a “Trump Rally”. Wall Street, Hedge Funds and others looked more closely at his proposals and decided, for the markets this was a good thing, and off the market went. While I may sound like a broken record, the market while potentially dangerous to people trying to time the market, is a great place to store and grow your wealth. In my January 6th 2015 letter I wrote that “I believe we will see the DOW hit 20,000 in the next few years.” Several people commented at the time that I must be taking advantage of our new marijuana laws. To clarify, I was not. The market hit a high of 19,853 and we should see the 20,000 number sooner than later. The Morningstar broad index was up 12.44 % for the year. The market will continue to jump up and down as it always has. GDP (Gross Domestic Growth) will grow this year just under 2%. The area where I am focusing my research is how the bond market will react to a raising interest rate environment. We have had the bond maturities between 3 to 6 years out and that appears to be about right. We will be watching events on the ground and react accordingly, if needed.
In closing we thank you for your continued trust in us. We look forward to talking and seeing you soon. Call with any questions. Happy New Year!
Willis G. Ashby, CFP®