My guess is if we would have taken a poll in early 2016, few people (ourselves included) would have predicted the year to date returns that we have experienced. Remember the fast decline in January/February in reaction to concerns over Chinese slowdown? How about the overnight drop in response to Brexit? These events have not slowed markets in the year-to-date period as they now sit near all-time highs, with fixed income returns and US equity returns of 4-6% on the year, depending on the index. Emerging markets tell an even more compelling story, with returns of almost 12% year to date. See summary of market returns by clicking on the image below.
How does this happen? How can we have such strong performance in the face of so many volatile moves and remaining unrest both overseas (with Brexit fallout and ongoing terrorism threats) and here at home (the election is looming, need we say more)?
In short, this is the story of investing. As we like to say, while history doesn't repeat itself, it does tend to rhyme. We have been through correction periods before and we will endure them again. While many of us wish to think wealth accumulation follows an upward sloping straight line, it is very seldom that. It is a process that is going to result in more of a scatter plot of values/returns, thru which a trend line is drawn over a meaningful period of time that hopefully is sloped in the desired direction
We have been touting this concept of "stay the course" and few things illustrate that better than 2016. We are proud of the financial plans and targeted allocations we have developed in connection with all of you. They are designed for these volatile periods and serve to protect your wealth during corrections. But more importantly, they are designed to help you stay the course. To help you trust in a process that will, over time, produce the trend line you are hoping for.
We are thrilled with results year to date and despite the pending uncertainty here and abroad, we remain confident in our portfolios and the performance for the remainder of the year.
Stay the course - we look forward to continuing along the trend line with you!