Altium 2016 Fourth Quarter Update & 2017 Outlook
On behalf of the Altium Investment Committee;
Happy New Year! We hope that you had a great holiday.
On the morning of November 8th, following a long night of election coverage, it appeared as though we were going to end the year in the same manner in which it started; with extreme volatility and falling equity markets. However, things turned out differently. Before we discuss our expectations for 2017, let us first take a quick look back at a year that reinforced our belief that favorable long term investment results will be achieved by remaining committed to a diversified and strategically allocated portfolio.
CHART 1: 2016 major index percentage price change; Source: YCharts.
CHART 2: S&P 500 2016 price chart highlighting January decline, “Brexit” and “Trump rally.” Source: Bloomberg.
“Someone's sitting in the shade today because someone planted a tree a long time ago.”
– Warren Buffet.
We maintain a positive fundamental view with a full understanding that the broad markets will continue to experience volatility and we anticipate a pause in the euphoric “Trump Rally.” We believe the likelihood of a near-term recession is low, supported by favorable economic data and improving corporate earnings. Economic recessions are a part of history, in fact there have been 17 recessions reported since 1920. On average these recessions have lasted roughly a year and have resulted in significant and sustainable market declines. Again, we do not anticipate a near term recession in the U.S., however, when looking back to every single recession and non-recession market correction, it is clear that “staying the course” has proven to be the most effective strategy for the long-term investor. In chart 3 below we highlight the last two recessions (2001 & 2008) and identify the market corrections and subsequent recoveries (indicated by the S&P 500 index performance). In this same chart you will notice that the recent non-recessionary corrections in 2011 and early 2016 turned out to be only temporary pauses in a bull market.
CHART 3: S&P 500 price chart (1999 – 2016); Source: Bloomberg.
The quote above by Warren Buffett is not one of his most famous quotes, but we thought the message was relevant to our commentary today. In every communication we talk about the importance of remaining committed to a strategically allocated and well diversified investment portfolio. While it sometimes requires extra patience and time, we believe that long term investors will be rewarded by staying disciplined. We reiterate this message again today and we look forward to meeting with you again soon to review your individual plans.
Until we see you, we wish you all the best.
Gregory Slater, CFA, CFP
Chief Investment Officer
Altium Wealth Management LLC (“Altium”) is an SEC registered investment adviser with its principal place of business in the State of New York. Registration does not imply a certain level of skill or training. For information pertaining to the registration status of Altium, please contact Altium or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov).
The information contained herein is provided for general informational purposes only, reflects the opinions of Altium, and should not be construed as personalized investment advice. The performance results presented herein simply reflect the performance of various benchmark indices over a period of time and do not represent any actual performance results of Altium. Past performance is no guarantee of future results and there can be no assurance that any particular strategy or investment will prove profitable. This newsletter contains certain forward-looking statements that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward-looking statements. As such, there is no guarantee that the views and opinions expressed in this newsletter will come to pass. Additionally, this newsletter contains information derived from third party sources. Although we believe these third party sources to be reliable, we make no representations as to the accuracy or completeness of any information prepared by any unaffiliated third party incorporated herein, and take no responsibility therefore. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Clients should contact Altium promptly if they experience changes in their financial situations relevant to the management of their accounts.
For additional information about Altium, including fees and services, send for our disclosure statement as set forth on Form ADV from Altium using the contact information herein. Please read the disclosure statement carefully before you invest or send money.
Share This Page:
This page is maintained by Altium Wealth Management, LLC, a registered investment advisor and is provided for information purposes only. Please see Altium's Privacy Policies and additional Disclosures.