Thrown for a Loop

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When any one of us looks at the markets and tries to predict the outcome, sometimes we are right and sometimes we are wrong. It is the same in life, I think. We might think we know what is going to happen, and then, bam! We get thrown for a loop. Charles Richards, a Certified Financial Planner whose articles appear in the New York Times, had just such a thing happen. You can imagine the size of the loop even without reading The Wish List I Made After My Wife Almost Died. Richards discovers some pretty important truths about his priorities. He makes a good point that looking at our lives and assessing our priorities is important because when drastic things happen we don’t want to be sitting on regrets. Financial planning is part of that: assessing our personal and financial goals in tandem, we look at what we expect to happen and leave some room for the surprises life can throw at us.

Inflation goals, or targets, has led the Fed to make its first interest rate raise of 2017. We say first because it now appears that we will be looking forward to two or three more this year. Inflation expectations were mainly unadjusted with 2017s adjusting from 1.8% to 1.9%; still below the Fed’s target of 2% inflation.

Turing away from inflation toward investments, we note that the U.S. markets are still close to their all-time highs. Russell Investments’ March 2017 Global Outlook, Fake News Rally?, addressed the current high valuation of the U.S. stock market. Their perspective was that the strength of market fundamentals should be questioned. Blackrock Investment Institute’s Second Quarter Market Outlook predicts there may be more upside surprises, citing indicators that signal growth estimates in the near future. The debate continues; and the recent small pull-back eased the high valuations a little bit.

With populism being all the vogue in the headlines, we sometimes miss what has been going on with the markets in the rest of the world. Europe’s Stealth Comeback was the headline in a recent Global Macro Outlook by Blackrock. Absent any political upheaval or similar dynamics, they see that the Eurozone momentum could continue to gain. Russell Investments (reference above) also mentioned optimism in the European markets may be more justified.

For a few of the indices, the U.S. stock market was close to flat-lined for March. The blue-chip barometer (the DowTR)* registered at a negative 0.60%. The S&P 500 Index (SPXTR)* had a beat and added .12% with the help of dividends. The tech-rich Nasdaq Composite (COMPTR)* registered a heart-beat and added 1.48%. The S&P Case-Shiller recent report showed that prices continue to rise across the country. On Tuesday, March 28, 2017, the S&P CoreLogic S&P Case-Shiller national index reported that it had set a 31-month annual return high. The 20-city composite January Home Price Index reported a 5.7% year-over-year gain; up from the 5.5% gain posted in December. Before seasonal adjustments, month-over-month data also showed a fraction of a gain with the month of January posting a 0.2% increase over the month of December for the 20-city composite index.

Regards and Thank you,

The Team at White Raven Financial

*Indexes are unmanaged and do not reflect service fees, commissions, or taxes. You cannot invest directly in an index. Past performance is not necessarily indicative of future results. Returns for the DOW, S&P500 and the NASDAQ is the NAV total return provided by Morning Star as of 2017March31


Diane Jochimsen

Meet the Author:
Diane Jochimsen

Diane Jochimsen is the founder and lead financial advisor at White Raven Financial. Whether working on investment portfolios or with a financial plan, Diane always seeks to know more about clients’ values, aspirations, and end goals.