We are pleased to deliver your November month-end snapshot report. By clicking on the button above, you can view, download, or print your current November month-end report and previous month-end reports. If you'd like to discuss the report or any other financial planning topics, please schedule some time directly on my calendar.
November Recap
Donald Trump won the US presidential election, surprising most analysts. Stocks initially fell in November before quickly rebounding on hopes that Trump's policies will boost the economy. US stocks finished the month with solid gains, but all other major asset classes lost value.
With one month to go in 2016, US stocks are now in prime position to extend their reign of asset class domination. US stocks have been either the best or second best performing asset class in six of the past seven years. Historically, streaks of this magnitude and duration by either US or International Stocks are not uncommon, but they never last forever. In our view, the longer this trend lasts, the more attractive a diversified approach with periodic rebalancing becomes on a forward-looking basis.
Solid US economic growth data this month leaves the Fed squarely on track to raise interest rates in December. The short-term impact has been a boost to the dollar, which has been one factor in recent US stock leadership. This environment also puts pressure on bonds, with the Barclays Global Aggregate Bond Index suffering its worst monthly loss since its inception in 1990. Bonds in our managed portfolios held up better than the major aggregate indexes. TIPS, high yield corporate bonds and a modestly lower effective duration all helped.
Based on current economic data, we expect the Fed to raise rates this month, and more than likely rates will be raised at least twice in 2017. However, as long as the hikes remain spaced out and in small denominations, they shouldn't derail economic growth and will create only minor headwinds for stocks and bonds.
Diversified Personal Capital managed accounts performed well compared to most globally diversified approaches in November. Within US stocks, small cap exposure helped our more evenly weighted US equity approach to modestly outperform major capitalization weighted indexes in most portfolios.
As always, let me know if there is anything we can do or if you have any questions.
Greg
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