Market Update-Summer 2017



Well, the year certainly is flying by.  We already are in the third quarter of 2017.  The summer is winding down and I hope you have had a chance to relax and do something fun.

Based on the daily news, you would think the market should be in the doldrums, we should have had a substantial market correction.  Instead the market has continued to make its way up to record territory!!!  Will we have a correction?  When will the correction occur?  How much will the market decline?  No one can answer them with accuracy.  If you are a long-term investor, these questions are not relevant.  No one can answer any of these questions.  In the long term, the answers aren’t crucial.

Year to date returns:
DJIA – +9.8%*
Nasdaq – +15.4*
S&P 500 – 8.5%*
MSCI EAFE Index – 11.4%**

The markets seem to be ignoring the news of the day, the scandals, the infighting, and the geopolitical issues.  Given such upwards movement in the markets, it seems evident that we should have a pullback.  When it comes it will be temporary and we will rely on diversification and discipline to buffer the short-lived downturns until the markets have time to recover.

We talk a lot about diversification when managing your investments.  Of course, nothing is guaranteed but, it is a tool we use to try to reduce fluctuations and improve the long-term returns in a portfolio by creating a mix of stocks versus bonds, international vs domestic holdings, big vs small companies, etc.  It includes geographic, sector and industry diversification.  The purpose is to blend these investments together so they complement each other.  As one asset underperforms the other does well.

It is almost impossible to time the movements of the markets.  Those who have the discipline to stick with a diversified portfolio that is appropriate for their risk tolerance, time horizon and required rate of return will benefit from simply staying the course and rebalancing when necessary.

We are closer to the end of the year.  Thus, this is a good time to review your personal finances to see where you stand.  Have you had any changes in your life that requires a review of your “Plan”?  Do you anticipate any changes in your life?  Do you need to review your estate plan?  Perhaps it is time for a tune up!

As always, we welcome any questions you have and are happy to discuss strategies that keep you diversified in good times and bad.

Enjoy the rest of the summer.

*WSJ, August 22, 2017 pg B7
**MSCI EAFE Index. www.marketwatch.com. MarketWatch Inc. 21 August 2017. Web. 22 August 2017.