Thanksgiving Holiday Market and Office Schedule:
The U.S. Financial markets will be closed on Thursday, November 24th for the Thanksgiving Holiday, and will have a short trading session on Friday, November 25th, closing at 12:00 noon CST, 1:00pm EST. Our offices will close early on Wednesday, November 23rd at 3:00pm CST, and we will be closed Thursday and Friday for the Thanksgiving Holiday. Any banking business, such as withdrawals from accounts, must be processed on or before Wednesday, November 23rd. Otherwise transactions will be processed on Monday, November 28th after the Holiday.
This year, as we have done so many years in the past, we wanted to share with all of you our thoughts as we each reflect on our lives this time of year.
I am very grateful for my family, friends and long term relationships both personally and professionally.
Regardless of what side of the political aisle you are on, I think we can all agree that this election season has been a little unnerving. As my wife and I raise our sweet daughter, I’ve become more acutely aware of the need for real relationships and experiences in life. Whether it’s through your faith, family, or friendships, in the words of Henry David Thoreau, we are all designed “to live deep and suck out all the marrow of life.” In our day and age, we have so much that competes for our attention, whether it’s social media or negative news feeds, and yet we have so few hours to devote ourselves to in a day. So in reflection, I’ve recognized that I really have an embarrassment of riches when it comes to things in life that really matter and I want to be intentional in my gratitude for these things. As the holiday season begins, I hope that you know the total F.I.G. family is part of this immense blessing in my family’s life.
On August 11, my wife Betsy and I experienced the birth to our first child, Jack. He had the pleasure of meeting some of you at this year’s client appreciation event. He has been, and continues to be, a tremendous blessing to us, and has helped put many facets of life into perspective. He was born two weeks early, and it took quite some time to get him back up to a healthy weight. He is now active, happy and healthy, and we couldn’t feel more appreciative for that. For those of you that have embarked on the journey of having children, you already understand that it’s a miracle any child can be born without some form of health issues. For ours to be so temporary and so incredibly minor, we feel overwhelmingly fortunate. We continue to thank the Lord every day for his good graces. I encourage everyone to be observant this holiday season, reach out to their neighbors and lend a hand to those around you. We all have something to be thankful for, and you may help others remember that too. Sam
It’s hard to believe that 33 years ago next month I walked out the door at E.F. Hutton in downtown Oklahoma City and opened the doors at F.I.G. I am so thankful for all of you and the blessing you and your families have been to me and my family over the time we have known each other. God has truly blessed my business life over this entire period. After becoming truly “empty nesters” this year, with the college graduation and marriage of our youngest daughter, I realize even more than ever before how blessed I truly am with a wonderful wife, Jeanita of 39 years, and our entire family that keeps growing with “in-laws” and grandchildren. The older I get, the more I realize just how blessed I really am in life, with what I have been able to experience so far, and remain optimistic of what still lies ahead. God, family, and good health are things in life that matter most and carry no material cost. I am so thankful for that! They do require time and effort to nurture but in the end, they’re worth it. May you all reflect personally this year on what blessings you have and how they can be shared with others less fortunate all around us. Happy Thanksgiving!
The election is finally over. It wasn’t supposed to happen – a Trump presidency. It’s a Dewey Defeats Truman headline for the digital age. In the same vein, the post-election rally in stocks wasn’t supposed to happen either. We won’t spend time rehashing the political end as that’s being done nonstop on the cable channels.
Over the past week the U.S. stock markets have rallied and interest rates have risen. The Dow Jones Industrial Average rallied 5.36% last week and is now up 8.03% so far this year as of yesterday’s close. The broader based Standard & Poor’s 500 stock index rose 3.8% for the week ending last Friday, and is 5.91% higher than the start of this year as of November 14th. (Google Finance)
Interest rates have risen fairly sharply over the past week. As of yesterday, the yield for the 10 year U.S. Treasury jumped to 2.26%. This compares with a yield of just 1.375% on July 5th of this year. Bond prices move inversely to interest rates, and price of long term bonds has dropped the most this past week due to the spike in rates. (CNBC) Mortgage rates have also increased, with the current 30 year fixed rate mortgage now at 3.88% and the 15 year rate sits at 3.07%. (Bankrate.com)
Oil prices have dropped back to $43.32 per barrel for West Texas Intermediate Crude as of November 14th. This compares with $37.07 per barrel at the beginning of the year. (MarketWatch)
It’s not just the pollsters scratching their heads. We had suggested prior to the election that the markets preferred a Clinton win. She represented continuity and no real surprises. Trump represented uncertainty, and markets hate uncertainty. Late Tuesday evening, when odds were rising that Trump was headed to victory, overnight stock futures suggested the Dow would open 800 points lower on Wednesday morning (Bloomberg). But shares began to climb back in the early morning hours. Markets opened near the unchanged mark on Wednesday before galloping ahead. It was a Brexit-like reaction in the markets that had occurred while most people were watching the returns or had already gone to bed. It was a nonevent for long-term investors.
So what happened? The election is over and the results weren’t contested. That in itself may have attracted cash sitting on the sidelines. There has been a rotation within the market as well, with funds moving into certain stocks and sectors that investors anticipate could do well moving forward with the changes in the political environment and selling within others.
For now, the fundamentals that historically power or restrain stocks remain favorable. The economy is expanding modestly. And S&P 500 earnings turned positive in the third quarter and are forecast to rise a respectable 4.1% (with 92% having reported, Thomson Reuters). It marks the end of a four-quarter earnings recession.
We fortunately had positioned the bulk of our fixed income/bond assets into short-term maturities, and this has helped our portfolios weather the recent rise in interest rates. Our individual stocks/equities have also performed well overall this year, and we are very pleased at this point with the net performance of client portfolios so far in 2016 across all risk spectrums as of this writing. We will continue to monitor the situation and make adjustments moving forward if warranted.
There is no doubt it has been a difficult election, and many are relieved it is over. Some are excited by the outcome, while others are bitterly disappointed. But a video made by President Obama (prior to the votes being tallied) summed it up well. “No matter what happens, the sun will rise in the morning.” It did.
We appreciate the privilege to serve each and every one of you and look forward to working together in the years to come. Have a blessed Thanksgiving Holiday.
Your TEAM at F.I.G. Financial Advisory Services, Inc.
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1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
3 The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly. Past performance does not guarantee future results.
5 New York Mercantile Exchange front-month contract; Prices can and do vary; past performance does not guarantee future results.