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A Year in Review

By Mike Bischoff, CFP

The S&P 500 is one of the most common benchmarks for the overall US stock market and we believe that it is the best representation of the US stock market. On January 2, 2015 it opened the year at 2058.  The year started on an upward trend until late-May and then started to pull back in August with concerns in the international markets.  The beginning of the year brought optimism and excitement with the S&P 500 hitting an all-time high.  It turned very quickly when all the volatility started. The third quarter ended in September with the US market down for the year with despondency and  depression on some minds.  October saw a positive move upward erasing some of the previous losses.  The fourth quarter brought us hope, relief and optimism while the S&P 500 end 2015 at 2044.  The index ended almost exactly where it started for the year.   


2015 has been a year of waiting.  Much of the waiting revolves around when the      Federal Reserve would finally boost short-term interest rates.  The first move is over and we expect modest increases in 2016 as the economy continues to grow.  Keep in mind, it will take several years for cash, money markets and CD rates to climb back into the 3 to 4% range.  Rising rates do not necessarily mean negative bond returns.  Various asset classes respond differently to interest rate changes.  A very high percentage of bonds total return is generated by its income and higher yields will ultimately help returns.  We will continue to hold bonds in our client’s portfolios for the stability they provide.  Diversification is crucial in constructing any portfolio.                  

We continue to rebalance portfolios on a regular basis and 2015 has brought several portfolio changes.  We’ll look back on 2015 as a very volatile year for stock prices.  The range between the high and low on the S&P 500 was 11.5%.  A correction of this   percentage is normal every few years.  Thank you for your business and I think you’ll be surprised with the positive results in the year to come.                     

A brighter outlook for 2016

  • The Federal Reserve has forecasted a somewhat faster economic growth in 2016

  • Unemployment rate will continue to fall

  • Lower oil and gas prices will help consumer spending

  • Housing prices continue to get stronger 

  • The US stock market historically performs well in election years with an over 80% probability of positive returns.      

  • Rising interest rates are generally good for stock prices  

  • Continued low inflationary environment

  • Advances in technology and health care                             

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