Newsletter Quarter 4, 2016
Fourth Quarter 2016 Newsletter
For those of you who have discretionary managed accounts with us, enclosed with this newsletter is a Performance Report for the 4th quarter and year-end. As you might imagine, great care needs to be taken by those firms who supply data and performance figures to the industry, to be sure the results are as accurate as possible. By the time the market data and portfolio results have been verified and made available to us, we are typically 6 weeks or so into the next quarter. At this time of year, we find ourselves looking back on 2016 and, at the same time, having some sense about where 2017 may take us. For us, February is the beginning of Spring Fever. The holidays have passed; we have usually had a January thaw, and spring is actually beginning to be visible on the horizon.
2016 was so many things to us. We built a new office, and celebrated with many of you at our Open House! We welcomed new clients and sadly said goodbye to some dear, long-time ones. What a year it was for our country; at times surprising, and certainly interesting, and overall positive for investors. We experienced Brexit, which may create a combination of problems/opportunities for the UK and all of Europe. We lived through what seemed like the longest and unusual road to the presidential elections. The Fed finally began a phase of rising interest rates, with the most anticipated and expected rate hike in our memories. Through it all, the domestic equity markets finished strongly; the bond market reacted in advance of the December rate hike with a significant pullback late Oct-Nov, but started to rally year-end. We will continue to position our investments to weather and produce a good value in a rising rate cycle.
We have been holding a lot of cash for much of 2016. In the last several weeks, we have seen some good opportunities in the equity market to deploy some cash. We know there is a great deal of uncertainty in the U.S. and around the world, as there always is for one reason or another. Many analysts and market prognosticators try to anticipate what may be the reaction to an action which has just taken place, or may take place. They make decisions on their investment advice based on what may be likely or possibly occur. Our focus in 2017 will continue to be on studying how the markets and sectors within them are actually reacting, and to have a disciplined and thoughtful game plan to avoid risk for our clients and hold onto the opportunity for growth, as various events unfold. Who could have accurately predicted all the events of 2016 which moved the markets either up or down?
Tax season is upon us. Please be sure you make contributions to IRAs before the deadline. If you would like us to share information with your accountant, and haven’t already given us authorization, let us know. Note, Congress just voted to make permanent a special option for those over 70 ½ to satisfy part or all of their RMD by making direct contributions to a qualified charity. Please call us with any questions or concerns.
You may have heard or read last year about the DOL regulations which may bring major changes in the handling of qualified retirement plans and IRAs. The most recent news is that implementation will be delayed and studied for possible changes. We and Cantella, have been working to make whatever transition(s) may be necessary as seamless and beneficial to our clients as possible. Our hope is that the intention to create a better environment for investors saving for retirement, does not inadvertently limit their choices or resources for sound investment advice.
When you receive this newsletter, we should be close to the beginning of Daylight Savings Time and spring. We look forward to the longer days, budding flowers, and the promise of summer. And we look forward to continuing as your trusted advisors: looking out for your best interests; helping you with tax, retirement, and estate planning; managing your investments, and truly enjoying working with you.
Warmly;
The Galarneau Group
