January 8, 2018
Those who have knowledge, don’t predict. Those who predict, don’t have knowledge. Lao Tzu
Where are we, at the end of December?
It would have been hard to predict a year that was as great as 2017. The S&P 500 was up every single month and has risen for 14 consecutive months, the longest run in history.
When people ask me what I think, I tell them that this coming summer, when I write this newsletter, we should be looking at higher prices, according to market statistics. If that changes, we will probably have some warning, but there are no guarantees. There could always be some shock to the system, such as geopolitical, but it’s a game of what the statistics suggest – and a healthy bull market is what they suggest. January has already begun (last week) on a positive run.
2018 could turn into a big “me too” year, meaning that many, many people who have not been invested, finally decide they need to buy in. Usually the last people to get on the bus are retail investors who either have been skeptics or are just getting word.
In any case, rather than predict, I will keep my eye on statistics and linear regression curves……
How Did the Markets and our Funds Do?
All index and fund returns are courtesy Morningstar.com.
The one glaring negative was the medical equipment sector fund, which I’ve removed from all the accounts. To put it into perspective, its 3 month history (Oct, Nov, Dec) was 1.64%, 2.94%, -3.35%. That dragged down December returns, more for those in Fidelity Funds Only 401K accounts. Small company funds were a notable exception among the major indexes, but we are not using those. The technology indexes took a breather after a stellar year.
| S&P 500 | 0.98% | ||
| Nasdaq (technology) | 0.43% | ||
| Dow | 1.84% | ||
| NYSE Composite | 1.43% | ||
| Morningstar Diversified Emerging Mkts | 3.55% | ||
| Russell 2000 (small co) | -0.56% | ||
| US Aggregate Bond Index | 0.38% | ||
| IEMG | 3.66% | iShares Emerging Markets | Fidelity commission free stock ETF |
| FQAL | 1.29% | Fidelity Quality Factor | Fidelity commission free stock ETF |
| ONEQ | 0.43% | Fidelity Nasdaq | Fidelity commission free stock ETF |
| FTEC | 0.10% | Fidelity Info Tech | Fidelity commission free stock ETF |
| FHLC | -0.65% | Fidelity MSCI Healthcare | Fidelity commission free stock ETF |
| FMAT | 1.99% | Fidelity Materials | Fidelity commission free stock ETF |
| FIDU | 1.69% | Fidelity Industrials | Fidelity commission free stock ETF |
| FBIOX | 1.51% | Fidelity Biotech | stock mutual fund |
| FSMEX | -3.35% | Fidelity Medical Equipment | stock mutual fund |
| FCNTX | 0.33% | Fidelity Contra Fund | stock mutual fund |
| FBGRX | 0.84% | Fidelity Blue Chip Growth | stock mutual fund |
| CFRAX | 0.21% | Catalyst floating rate | bond mutual fund |
| FFRAX | 0.34% | Fidelity floating rate | bond mutual fund |
| RNDLX | 0.62% | RiverNorth Strategic | bond mutual fund |
| FNMIX | 0.94% | Fidelity New Market | bond mutual fund |
| FAGIX | 0.62% | Fidelity Capital & Income | bond mutual fund |
| LENDX | 0.43% | Stone Ridge Alternative | peer to peer fixed return mutual fund |
| Prime Meridian Small Bus LP | 0.56% | 1 month lag | private peer to peer fixed return |
| Prime Meridian Real Estate LP | 0.59% | 1 month lag | private peer to peer fixed return |
| KIP, Kay Income Partners LP | 0.56% | private mortgage fund |
Your investment return(s) for the month of December was/were as follows:
We should talk if you would like to review exactly where you stand or if we should consider a change. I am available at your convenience. I have Skype video in case you would like to do a video conference.
Best,