Contributed by Doug Walters
There is much to be thankful for as we wrap up the Thanksgiving festivities and begin preparing for the upcoming holiday season. 2017 has been particularly kind to investment portfolios. It is useful to take a moment to reflect on and appreciate this, as positive returns should never be taken for granted. While we are very thankful, we cannot help but feel there is more that we, as investors, need as we approach the new year. As such, we have also put together our holiday wish list.
- Thank you international stocks… your exceptional year-to-date performance is a reminder as to why portfolio diversification is essential.
- Thank you U.S. stocks… you did not outperform international, but we are still happy with the 18% year-to-date performance of the S&P 500.
- Thank you rising economic activity… cyclical stocks and sectors like Caterpillar (CAT) and Materials are enjoying the ride.
- Thank you Janet Yellen… for being so accommodative with slow and deliberate Fed rate increases. We hope to be thanking your successor this time next year.
- Thank you reduced corporate regulation… small cap stocks and the Financials sector should be able to spend less time cutting through red tape and more time winning.
- Thank you tax reform process… you are giving equities hope to rally on, and providing a steady stream of Strategic Insights material.
- Thank you technology innovation… consumers and investors have a seemingly insatiable appetite for both your tech gadgets and tech stocks.
- Thank you Disney (DIS)… consistently releasing your new Star Wars movies on my birthday weekend in December gives me a reason to look forward to getting older.
- Thank you Insights readers… your patronage keeps the Strategic Investment Team energized!
Holiday Wish List
With U.S. stocks up 18%, we cannot help but feel that wishing for more would be perceived as greedy. Nonetheless, we have begun to put together an investor wish list for the holidays and beyond.
- Monopoly… Rising corporate earnings to help justify elevated stock valuations. Advance to Go (collect $200).
- Legos… More bipartisanship on no-brainer legislation like an infrastructure bill. Let’s get building!
- A Crisp New Bill… Passage of a tax reform legislation that strikes the right balance for corporations and individuals. Cha-ching!
- Ski Vacation… A steepening slope of the yield curve to better incentivize banks to lend and help fend off an economic downturn. Time to move on from the bunny slope.
- Air Compressor… Rising wage inflation and a modest rise in personal consumption expenditure inflation. Pump up these missing ingredients of a healthy economy.
- Fingerlings®… Need a distraction from market volatility? Why not attach a little robo-monkey to your finger! (official website)
The Strategic Investment Team
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