2017 was a year full of headlines: the second-longest bull market of the last 100 years; a new Fed Chairman in Q4; Bitcoin and cryptocurrency; sweeping tax reform…

What did this mean for all of us?

Tax Reform

Gains throughout the year (especially in the final quarter) were helped by two magic words: “tax reform.” The new legislation slashes corporate tax rates, directly translating into higher income for most companies. While this allows for greater dividends, more share buybacks, and lower price-to-earnings ratios, the somewhat muted reaction upon the passage suggests most of the benefit is priced in.

A Look Forward

The new year is bringing higher valuations, political uncertainty, and – most likely – rising interest rates. But investors, bolstered by 2017's consistent gains, seem to be much more optimistic than they were at this time a year ago. What does this mean? It again reflects the emotional challenges of investing in the market. Here's where having a strategic investment plan that fits your unique needs can be beneficial to reaching your long-term goals.

Our Take

We've said it before, and we'll continue saying it: in our view, a good plan includes a diversified approach. While U.S. growth stocks have dominated this long bull market – which made owning anything else feel somewhat disappointing – one of the most common paths to failure is chasing what has done best in the past. Markets go up and down. Different segments come in and out of favor.
Our expectations are that those investors who stay diversified will likely end up with more money over time, and those who rebalance along the way should fare better still