Political uncertainty
It was a tough year to make consistent profits using our
index-based approach to investing (but we did anyway) because rather than moving in-line with earnings announcements, markets moved lockstep with political
events such as the continuing 'War on Terror', Brexit
and the U.S. election.
Dow gains
Just because the Dow Jones Industrial Average made new highs
this year does not mean that your should just as high also. The DJIN index is made up of selected stocks
based on their market capitalization. The index may slightly over-represent the health or the strength of the economy. I think a better indicator of the strength and health of the economy are the earnings from companies that make up the S&P 500. The
fact that many investors buy stocks based on different investment
strategies which does not include Dow stocks suggest that any movements in the Dow, whether up or down, may not affect your investments.
Tepid recovery
Finally, I was expecting a robust economic recovery but that did not materialize even though job growth picked-up in the third quarter of this year.
Many companies still did not hire and instead laid off employees i.e.. ATT layoffs. Not even the best productivity software could bridge the
gap between 2016 business friendly federal economic policies and the fear of another
recession.
I look forward to a better year in 2017. However, I think this year will also be politically driven. For example, The Jobs Act of 2015 and The Cures Act of 2016 will make a huge difference for many businesses and individuals next year in the biotechnology and pharmaceutical industry. I believe both
bills will be strong drivers of the economy in 2017 and beyond.
Thank you for joining UCS Investment Co and have a great
2017!
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