Year-End Market Commentary
Our market commentaries are issued each quarter to capture the short-term state of the market and remind readers of our long-term view. Year-end reviews are written infrequently, usually when markets are dramatically down or up. Thankfully, I’m writing because of the latter.
It’s hard to remember all the investor emotions throughout the year, but I’m certain that they were extreme compared to previous years. Post-election emotions, Russia, North Korea, Iran, Tweets, Judges, Repeal & Replace, ISIS are just a few of the emotionally charged issues, with clients having strong but varied views on how our country should deal with them.
At a minimum, even those with positive outlooks on the direction of our country expressed some uncertainty. Given the political, cultural and emotional divide in the country, one could hardly be faulted for having a pessimistic market outlook.
As of December 31 –
|US Large Cap (S&P 500)||up 22.83%|
|US Small Cap (Russell 2000)||up 14.65%|
|International Developed (MSCI EAFE)||up 25.03%|
|Emerging (MSCI EM)||up 37.28%|
|Global Real Estate (S&P Global REIT)||up 7.41%|
|Bonds (US Intermediate Govt/Credit)||up 2.14%|
Markets price risk, and as risk dissipates or outcomes improve, markets go up. Personally, I think the corporate tax cuts are a big positive, and the growing likelihood of its passage may have driven much of the returns this year. In addition to companies having more capital for investment and job creation, the more favorable tax environment could spur business formation and attract business from outside our borders, spurring personal income growth.
USA, Inc. has a great product – less regulation than other countries, strong laws and courts, and good infrastructure, but the price (corporate taxes) was too high. Time will tell, but so far, the markets seem to like what they see!
I’m excited about the team we’ve built at TrueWealth. I’ve been honored to lead the firm since its founding in 1999, but it’s time for someone else to head the firm, and I couldn’t be happier that Michael Maiorano became CEO on January 1, 2018. This is a fulfillment of a vision that I’ve had since our beginning, and it gives me a great deal of satisfaction to see it become a reality.
And for me? Well, I’m not going anywhere. As Chairman, I still have some work to do on behalf of the firm, and I look forward to getting back to serving more clients.
There’s much to be thankful for, and for us at TrueWealth, many of those blessings are our clients. So, to all of you, on behalf of all of us at TrueWealth, we thank you for allowing us to help you over the years to reach your most important personal and financial goals.
Happy New Year –
Jim Heard is Chairman of TrueWealth, LLC, a wealth management firm located in Atlanta. He has extensive experience spanning 30+ years in financial planning for Senior Executive Planning and Ultra-High Net Worth Individuals & Families. He can be reached at firstname.lastname@example.org or 404.487.0501.
TrueWealth, LLC (TW) obtains historical and other information from a wide variety of publicly available sources. We have taken all reasonable care and precaution to ensure that the information is fair and accurate or has been compiled from sources believed to be reliable. Nevertheless, we do not make any representations or warranty, express or implied, as to the accuracy, completeness, or fitness for any purpose or use of the information. The information may not in all cases be current, and it is subject to continuous change. Accordingly, you should not rely on any of the information as authoritative or a substitute for the exercise of your skill and judgment in making any investment or other decision. We shall not be liable for any direct, indirect, or consequential loss arising from any use of or reliance on the information from this article. TW and its affiliates do not have, nor claim to have, sources of inside or privileged information regarding expected future returns on any investment proposed. The recommendations developed by TW are based upon the professional judgment of TW and its individual advisory affiliates, and neither TW nor its affiliates can guarantee the results of any of their recommendations. Clients at all times may elect unilaterally to follow or ignore completely, or in part, any information, recommendation, or advice given by TW and its affiliates. Past performance is not necessarily indicative of future results.
© 2018 TrueWealth, LLC. All rights reserved. Any use of information contained in this article, including reproduction, modification, distribution or republication, without the prior written consent of TrueWealth, LLC is strictly prohibited.