Wealth Protect Status Update: November 2016

We email the status of our WealthProtect System* monthly and give probability (Low, Mid, High) of a change in status within the next two months. We also include a commentary on actions taken this month as well as changes in overall asset allocation.

Commentary

So the election results were not what conventional wisdom predicted, and neither was the market reaction. After S&P 500 futures dropped dramatically over the evening of the 8th, equities had a pretty good day on the Wednesday after the election instead of the crash that was expected. Since then the reaction of capital markets has been split. Developed equities in the US and overseas have risen, with small company stocks doing particularly well. Bond yields have also sharply risen, which has caused US Treasury Bonds and many other types of bonds to fall in value. Other interest-rate sensitive investments have also fallen, such as utility stocks, Real Estate Investment Trusts, emerging foreign equities, and commodities in general. In my opinion, this is still a reaction to the results of the election and likely an overreaction in the short term. Our WealthProtect System did not trigger; however Real Estate Investment Trusts and Commodities weakened sufficiently that they are close to triggering. We don't react to the emotions of the market. While the new Trump reality may portend better growth and maybe higher inflation, much remains to be seen. Having a well-diversified portfolio that is tactically nimble continues to be our preferred approach. Please call if you have questions.

Thanks as always for your trust.