Broker Check

The Most Wonderful Time of the Year

| January 18, 2017
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What a quarter! The celebration of Thanksgiving, Christmas, and a new year upon us. It is a good time to reflect, set resolutions, and prognosticate. Although, by the noise coming from some market pundits, perhaps the word we’re looking for is pontificate! With their persuasive commentary and confident gesturing, it can be easy to see these people as wise and reliable. It is my opinion, however, that they simply add to the overwhelming and typically misleading world of market commentary filled with arrogance and claims of absolutes.

Indeed, it is good to reflect on the past quarter and the entire year. What was the highlight for you? Could it be the election? How about the Federal Reserve raising interest rates? Is it the Dow Jones’ run to 20,000? Wrong! How can anyone not think it was the Chicago Cubs winning the World Series?! Does anything else even dare to compare?! I first visited Wrigley Field in second grade. Since that day, I have been a fan (for anyone counting that’s more than 45 years).

This past year has been quite a ride for everyone, but most certainly for investors. We began the year with the worst start… in history. There is an old saying, “As goes January, so goes the year.” Thank goodness this didn’t come true for 2016! Most stock markets around the world have had a very good year. The bond market cannot make the same claim. Interest rates have been on a roller coaster the entire year. Yields hit lows with concern over Great Britain leaving the European Union (aka: BREXIT). The prognosticators shouted expectations of doom and gloom, but within a very short period of time, both stock and bond markets returned to pre-BREXIT levels.

The Federal Reserve raised interest rates in December and signaled additional hikes may follow in 2017. This is quite similar to where we were last year at this time. There is considerable talk from our President-elect to modify tax rates and eliminate burdensome regulations. The results of the U.S. elections in November have spurred a significant rally in U.S. stocks, which we continue to experience today. Do remember: the same cannot be said about the bond market or international stocks. I am not in the prediction game, but it seems apparent that we will see market volatility in 2017, and that at least one of the causes of this volatility just may come from the White House.

The beginning of a new year is always a wonderful time to set resolutions. My resolution is to have a year of positivity and success. What are our resolutions to you? There are always aspirational goals we set as a firm, but the majority of our time is happily and purposely spent on our core competencies and working to deliver you a better investment experience within the ever-changing markets filled with (often distracting) media noise.

The foundational concepts on which we invest and do business are simple and academically proven. The reality is they are not easily followed. I’m sure many of you are thinking “he sounds like a broken record!” And… well, you’re right. But regardless of me being a slight annoyance on the topic, the concept is true and vitally important for investors to understand and embrace. Brad Steiman from Dimensional Fund Advisors (DFA) summed it up very well: “It is well documented that good food, exercise, avoiding too much alcohol, and sufficient sleep will improve the odds of being healthier. It is also well documented that accepting that markets work, avoiding stock picking and market timing, effectively diversifying a portfolio, and paying attention to costs will improve the odds of being wealthier. It sounds simple, but it isn’t easy.” 1


Another DFA publication titled Prediction Season concludes: “Those who make changes to a long-term investment strategy based on short-term noise and predictions may be disappointed by the outcome. In the end, the only certain prediction about markets is that the future will remain full of uncertainty. History has shown us, however, that through this uncertainty, markets have rewarded long-term investors who are able to stay the course.” 2


In 2017 and always going forward, we resolve to never deviate from this sound core investment advice… no matter what the noise!




1   Brad Steiman. (2016). The Greatest Hits of Investing. Dimensional, 4.

2  Dimensional Fund Advisors. (2016). Prediction Season. Dimensional, 1-3.



The material in this publication is based on data sources we consider to be reliable, but it is not guaranteed as to accuracy and does not purport to be complete. The interpretation and organization of these ideas are the views of Kevin Welu and do not represent the opinions of TrueNorth Wealth Management. This information is not intended to be used as the primary basis of investment decisions nor because of particular individual client requirements, should it be construed as advice designed to meet the investment needs of one investor.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Private Advisor Group, a registered investment advisor. Private Advisor Group and TrueNorth Wealth Management are separate entities from LPL Financial.

The economic forecasts set forth in the presentation may not develop as predicted. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. No strategy assures success or protects against loss.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

The Dow Jones Industrial Average Index is comprised of U.S.-listed stocks of companies that produce other (non-transportation and non-utility) goods and services.

The Dow Jones Global ex-U.S. includes equity securities with readily available prices that trade globally, excluding the U.S. The index is a subset of the Dow Jones Global Total Stock Market Index.

The Large Cap Core index is an enhanced index created and administered by S&P which employs the AlphaDEX stock selection methodology to select stocks from the S&P 500 index.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
The prices of small and mid-cap stocks are generally more volatile than large cap stocks.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

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