Market Musings

December 2017

It has been a year of numerous new stock market highs, many of which have taken place in the midst of a 24-hour news cycle that provides a seemingly endless barrage of negativity. This is exactly the type of environment that underscores the importance of utilizing a disciplined investment approach. Focusing on headlines rather than long-term fundamentals and sound investing principles may likely have led to significant missed opportunities this year.

Like many of you, we are both thrilled and concerned with the pace of the stock market ascent. With this in mind, our general outlook is a bit more cautious, though we continue to encourage strategies focused on growth for assets invested for the long-term. Certainly a correction or pullback is overdue, however, we do not believe a long-term downturn, nor a recession, is likely to occur in the coming months. Looking beyond the frenetic partisan political news that tends to dominate the headlines these days, we continue to see positive signs in the economy. On December 7, 2017 the Bureau of Labor Statistics released the November jobs report. This report indicated that 228,000 new jobs were created in November. That's higher than the anticipated number (195,000), and leaves the unemployment rate unchanged at 4.1%, a 17 year low. Along with these positive indicators, we feel the market continues to be fueled by the hope that the current administration will pass tax reform that will be favorable for corporate America and therefore help spur new economic growth. In the midst of this, corporate earnings growth continues to be broad-based and fairly solid. There are some indications that the stock market may be a little ahead of itself so, as previously mentioned, it would not be at all surprising to see a pullback or correction. However, in general, we feel the outlook for 2018 is still fairly strong.

As always, we remain vigilant when managing your assets. We are coming up on next portfolio rebalancing cycle and will be making some adjustments to our strategies at that point. As has been the case for most of this year, the focus of our efforts will continue to be on reducing both overall portfolio risk as well as correlation to the S&P 500. In addition we are looking for opportunities to harvest any losses in your portfolios in an effort to minimize taxable gains where possible.

Finally we would like to take this opportunity to wish you and your families a wonderful holiday season. We hope you have a happy, healthy and successful New Year!

 

 

The report herein is not a complete analysis of every material fact in respect to any company, industry or security. The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. Statistical information has been obtained from sources believed to be reliable, but its accuracy and completeness are not guaranteed. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request. Asset allocation and diversification cannot eliminate the risk of fluctuating prices and uncertain returns nor can they guarantee profit or protect against loss in declining markets.