With the new year come all sorts of new situations that we all must face. If you follow me at all, you know I avoid politics, but we will look at this for just a moment or so. Regardless of your political views, a change of administration is always something that the markets will react to. And throw in that we will most likely see one of the most drastic changes in a generation will most likely lead to some unusual movements in the markets. Will these movements be for the bears or the bulls? That is the million-dollar question that no one knows the answer to.
Right now we are looking at 20,000 for the DOW. An all-time high that has never before been seen. Since the spring of 2009, we have seen one of the best bull markets in recent memory. Not only has the market’s been on a great bull run but the unemployment rate is over half of what it was at the height of the Great Recession. But all you have to do is remember or try to remember what happens when Presidents change. At times the markets react and continue in the same manner as before the change. At other times, the markets reverse course and go in the opposite direction. Which way the markets go after next Friday, is as I said, anyone’s guess.
And with the new year comes the ever dreaded tax dilemma. Now there are no hidden surprises in store for those people who are filing their taxes this year, and they are not due until mid-April. It is wise to start now and begin getting your paperwork in order and get the preliminary work done now to avoid April rushes. And while it is the start of tax season it is also a good time to look at your financial plans.
At least once a year you need to review your financial plans to ensure you are still on course. Have your priorities changed? Did your risk tolerance change? These are things that only you can answer but they never the less are very important parts of one’s financial health and thereby should be part of your annual review of your plans. Do not neglect this and review it while you are preparing for the new year.
And finally everywhere I seem to look I see the hot stock picks for 2017 or the best mutual funds for 2017 or even the best exchange traded funds for 2017. What is the problem with all of these lists? They are based on the returns of 2016 and to be honest, that has nothing to do with what may or may not occur in 2017. There is a reason why in mutual fund and exchange traded fund ads they state; past performance is no indication of future returns. So if you read these articles do so with the fact that these articles are written by analysts who are basing the facts on prior events. Like with the markets after an election, no one can predict the next hot stock, mutual fund or exchange-traded fund.
2017 is full of unknowns, but that does not mean it will be a bad year for financial endeavors. Just be leery of change and what it means for you and your investments. Pay attention and be vigilant.
If you have any questions or better yet, an idea for a future post. I would love to hear from you so drop e an email or leave a message on the site. Here’s to the New Year and the unknown.