Market Update: Hope and Fear Spring Eternal
Since the election, a tightly wound balance between investor hope and fear has driven markets. Market valuations are influenced by a combination of fundamentals and investor sentiment. When emotions overshoot fundamentals, that’s when opportunity, or risk, can emerge. The first quarter opened with post-election momentum continuing to propel US markets to new highs, but the pace tempered late in the quarter with the realization that implementing President Trump’s pro-growth agenda would face potentially significant obstacles. The release of less-robust-than-expected economic data compounded this slowdown. Nonetheless, positive investor sentiment, the so-called “soft data,” continued to buoy the market overall.
by Alex J. Gross, CPA/PFS, CFP®, MST
Market Update: Recalculating…
When heading to a destination, many turn to Google Maps or other GPS apps for turn-by-turn directions. You have advance notice of turns, left-hand exits, and even accidents or road construction. Should you miss a turn, they recalculate your journey without judgment. No such reliable guide exists for investors, as the future of markets is impossible to map. Prudent investing therefore becomes an exercise in “recalculating” without a map, and building portfolios must take this reality into account. Confounding expectations are a regular feature of the markets and the fourth quarter was no exception. Clearly, the most surprising event was the election of Donald Trump, defying most experts’ predictions. This surprise poses many implications going forward, but the biggest impact on markets to date has been the rapid rise in interest rates. The move actually began before the election, as the 10-year Treasury moved from 1.6% on September 30 to 1.9% on Election Day. To be sure, the subsequent move to 2.5% by year-end was more impressive as investors fully embraced an expected pick-up in growth and inflation (see chart below). This recognition coincided with the increased likelihood of a Fed rate hike, which happened in December.
Daintree Advisors is pleased to announce that Barbara Attardo, Lauren Desforge, Alex Gross, and Mary Shahian have been named recipients of the 2017 Five Star Wealth Manager award as featured in Boston Magazine. To receive the award, wealth managers must meet 10 objective criteria evaluated via surveys of Boston area households and financial services professionals, as well as independent research. Five Star Professional, which sponsors the nationwide award program, published its list in the February 2017 edition of Boston Magazine. Wealth Managers do not pay a fee to be considered or placed on the final list of the 2017 Five Star Wealth Managers. The Five Star award is not indicative of the wealth manager’s future performance.
For more information on the research and selection methodology go to www.fivestarprofessional.com.
This past holiday season, Daintree employees volunteered at the Salvation Army Christmas Castle Program. This annual event provides needy families and individuals with food vouchers for Christmas dinner, warm clothing, and toys for their children. Our employees also donated coats and jackets for both adults and children to this worthy cause.