Happy New Year! And welcome to our first 2017 Market & Investment Update
“Buy on the promises, sell on the reality”
As I scan the news of the financial media that is not tied to marketing drama and partisan political ideological I am seeing more and more growing investment sentiment that the Trump rally may stall (or even see some selling) after he is sworn in to office this weekend. Wall Street pundits call this “buy on the rumor, sell on the news.”
The gist of the rising market nervousness is that the Trump rally was long on rhetoric but short on details, which now appears to be making the markets nervous. Strangely, I wrote similar concerns way back in November. I guess now all the big Wall Street investors finally read my notices to you as well.
In more recent notices I have said we will get more fully invested somewhat quickly so we can take advantage of the current “bull” stock market. Based on what has started to unfold in the markets, it may be prudent to wait until next week – when we get more clarity from big investors - to add to our current positions.
This weekend we bid farewell to the Democratic administration of President Barack Obama.
Regardless of what one thinks about his achievements (or lack of), he was dealt a very difficult hand when he came into office, having to get our nation out of the worst recession since the 1930's. In fact, if we look at the US economy today, it's in decent shape, having improved considerably since 2008, which means Trump et al can either improve on it - or screw it up.
However, as the Electoral College vote determined, the voters shunned Clinton partly due to Obama apparently not doing enough for a large minority of working class citizens. This is despite the massive obstructionism imposed on Obama by the do-nothing Republican Congress during the last six years of his reign. No doubt modern politics are nasty and dysfunctional, especially for American citizens who helplessly rely on the politicians to improve their lives.
But it is also true that during his tenure Barack Obama catered way too much to Wall Street and their elites, having used Goldman Sachs as the revolving door to the Treasury Department (like all recent American presidents have done - including now, Donald Trump). Sadly, Obama's hope and change mantra fell short for many people who voted for him twice in the last eight years.
During his tenure, however, Obama was able to achieve some very good things, like giving millions of Americans health care, negotiating with health insurance companies to accept pre-existing conditions as part of the Affordable Care Act, and his success at keeping the US economy from going into freefall after the previous Administration. Obama should also be applauded for being diplomatic and respectful of the Republican opposition, despite their often mean-spirited and disrespectful reciprocal behavior.
Additionally, Obama was intelligent, believed in science, was not homophobic, respected women as intelligent decision makers, and knew that xenophobia and hate did not solve our nation's problems. Also, Michelle Obama, as our First Lady, was smart, classy and gracious (like most of the modern US First Ladies who for the most part retained a much more positive legacy than their President husbands).
In the end, Barack Obama gave voting Americans a socially productive impetus to take another step forward - away from our history of inhumane slavery and Jim Crow racism. Also, with Barack Obama being America's first African American President, he unintentionallly brought to the surface much of the now outed closet racism and hate that has been seething in the angry and delusional minds of groups still espousing - overtly and covertly - a white superiority belief system.
From that historical perspective alone, we are a better nation for having elected Barack Obama - and for having been able to observe an "American" African-American family grow up and mature in the White House for eight years. That alone has diminished some of the shameful attitudes still cowering in America's underbelly.
Good luck to the Obamas - certainly one of the "coolest" families to inhabit the White House!
Fidelity IRA / Brokerage portfolio holdings (for our larger accounts):
Nasdaq 100 Stocks (QQQ) 10%
Industrials (XLI) 10%
S&P 500 Growth (IVW) 10%
Convertible Bonds (CWB) 5%
S&P 500 Equal Weight (RSP) 5%
Europe Hedged Equity (HEDJ) 5%
Japan Hedged Equity (DXJ) 5%
Short L/T US Treasuries (TLB) 5%
High Yield Bond (HYG) 5%
S-T Corporate High Yield Bond (SJNK) 5%
Apple (AAPL) 3%
Tesla (TSLA) 3%
Whole Foods Market (WFM) 3%
Money Market cash (30%)
Smaller Fidelity IRA / Brokerage portfolios (under 50K):Nasdaq 100 Stock Index (QQQ) 25%
S&P 500 Growth (IWV) 25%
Money market cash (50%) Fidelity ORP / 403b Portfolios (for most accounts):
S&P 500 Spartan Index fund 20%
Select Environmental Services fund 10%
Select Multimedia fund 10%
Select Software fund 10%
Contra Fund 10%
Convertible Bonds 10%
Goverment Money Market fund 30%
*All Fidelity account holdings listed above are current as of today