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January, 2017 Review and Outlook

By February 1, 2017September 16th, 2023No Comments


  1. Tax forms will start coming to you for reporting 2016 income tax information.
  2. Take steps now to protect your cybersecurity in 2017.
  3. Stocks start off the year on a positive note.
  4. Interest rates end flat for January.
  5. Expectations for higher corporate earnings continue.
  6. Questions arise over potential global trade policies of the new Administration.
  7. The month ended with some caution over current events.



As a reminder, different tax forms have various mailing deadlines for reporting 2016 tax information.  1099R forms-reporting distributions from retirement accounts-were mailed out on January 31stIF you only have an IRA account with Trust Co. of America as custodian and received a distribution in 2016, this is the only tax reporting from you will receive.  IF you have other non-retirement accounts, you may also receive Form(s) 1099-B, DIV, INT, MISC, or OID. The deadline for mailing out these forms for non-retirement accounts is February 15th.

Remember: There is often a “corrected 1099” issued after this date due to reclassification of mutual fund capital gains and/or dividends.  If this occurs, it results in a “Corrected 1099” and is sent out after the original February 15th mailing date.  It probably pays to wait until early March to actually file your return if you have a “taxable” investment account in the event a corrected 1099 is generated.

Don’t Forget:  Be sure to take advantage of the “CSV” or Excel file that is always available to be downloaded into most tax preparation software, and can save both time and money when producing your tax return.  We are happy to assist you in providing this to your tax preparer, or if you happen to use TurboTax yourself, you can personally import the tax information directly into the program.  PLEASE call us if you have questions or need assistance with this time and money saving process.  Your tax preparer will thank you as well.


  1. Sign up for notifications on your transactions:  You can sign up for email or text notifications with your bank and credit card companies when your account is charged or transactions occur over a certain limit.  You can usually do this online at their website and set some parameters for notifications.
  2. Update your software habitually: Viruses and malware can land on your hardware devices through outdated software. Often, hackers exploit known security holes in popular programs and Internet browsers. If you are running outdated software, the malware can silently infect your computers and lead to a variety of frauds. Regularly updating all the software on your devices can protect them from infection. This year, instead of postponing all the update notifications you receive, update the program right away. It will take a few minutes, but can save you from hours or days of trying to clean an infected computer or repair an identity theft.
  3. Back up your data: You should back up your data to two separate places—an external device (USB or external hard drive) and the cloud through (iCloud, Dropbox, or others). This will protect you in case something happens to one of the backups. This year, make backing up your files on at least a weekly basis a regular routine. Choose a time and do both your backups at that same time each week.



January started out the New Year on a positive note for the major U.S. stock indices.  After finishing 2016 strong, the markets continued to edge higher last month.  The Dow Jones Industrial Average gained .51% for the month and hit and briefly exceeded the “20,000 Dow” milestone before dropping off the high to finish January at 19,864.09.  The Standard & Poor’s 500 stock index rose 1.79% for the first month of this year. (MarketWatch, Google Finance)

Interest rates remained flat in January as measured by the yield for the 10 year U.S. Treasury which ended the month at 2.45%, the same level it was at the end of 2016. (U.S. Treasury)  The national average for a 30 year fixed rate mortgage now stands at 4.04%, while the 15 year fixed rate is currently 3.18%. (

Much of the optimism in the financial markets over the last three months can be traced back to the themes that have been running since Election Day. It’s a new administration that wants corporate tax cuts, individual tax reform, regulatory reform, higher defense spending, and a ramp-up in infrastructure spending. Yet, it’s also an administration that has railed against globalism and has shunned large, multilateral trade deals. Markets like the former but worry over the latter.

For now, it’s not just investors that have warmed to the change in Washington and the perception that business-friendly legislation is just around the corner. First, we’d be remiss if we didn’t state the obvious. The name Donald Trump elicits a myriad of reactions. Yet, surveys of consumer confidence have soared since the election, with the Consumer Confidence Index hitting its best reading in 15 years – see Figure 1.

Moreover, a measure of small business confidence is at its highest level in over a decade (National Federation of Independent Businesses).

Still, major proposals designed to create a more fertile ground for economic growth don’t happen overnight.  Washington moves slowly and competing interests can complicate matters. For example, talk of a “border adjustment tax” is a new wrinkle that just popped up on the horizon. But investors want a simple and clean cut in the corporate tax rate, dropping it from 35% to around 15-20%.

In some respects, January has been an interim period – a waiting period. It’s one where investors have been trying to evaluate how the new administration will govern, what its priorities will be, and how it will move forward. Trump was not a conventional candidate, which was part of his appeal to some and totally disagreeable to others. And he has yet to shed his unorthodox ways. He’s not shy about tweeting his opinion or ruffling feathers.

Some like the new style. Others abhor it. As your financial advisors we are not here to offer opinions on his leadership, or use this space as a political platform. Our goal is to discuss themes that are affecting the financial markets in either a positive or negative fashion. It’s to view what’s happening through the narrow prism of an investor. We will leave it to you to form your own conclusions regarding the broader aspect of his policy initiatives.

President-elect to president:

Investors crave a fair degree of certainty. They want quick enactment of pro-growth policies.  The rollout of his more controversial stances, including the restriction on immigration, created political uncertainty and some turbulence as the month came to a close.

It not only raises fears that Trump may get sidetracked, but there are rising concerns the pro-business message heard in November and the laser-liker focus on taxes may end up taking a back seat to other proposals and squabbling among Congressional leaders. Given the impressive run-up since Election Day, short-term traders used the political uncertainty as an excuse to sell as the month came to a close.

Long-term focus – the fundamentals:

Longer term, it’s really about corporate profits and profit expectations, economic growth, and interest rates.

The four-quarter earnings recession has ended, and earnings growth is forecast to accelerate and run above 10% in 2017 – see Figure 2. You have to go all the way back to early 2011 to find four-straight quarters of double-digit profit growth (Thomson Reuters).

Of course, earnings forecasts are subject to change given that there are plenty of moving parts in the earnings forecast equation, including U.S. and global economic performance and the dollar.

Moreover, firms are posting profit margins that are near record levels (S&P Dow Jones Indices). An acceleration in wage growth would be welcome. So would a rise in business investment, but it would likely whittle away at profit margins. Of course, that would likely occur in response to faster economic growth, which is a tailwind for profits. All forecasts rely on plenty of changing variables and are often adjusted regularly.

Meanwhile, the economy continues to expand, and the Fed currently believes that gradual rate hikes are the most likely path. The FED opted to keep rates unchanged at their meeting that adjourned today.

Volatility can’t be ruled out. It is a natural part of investing. Risk can be managed but not eliminated. For now, the fundamentals are generally supportive of stock prices.  We will keep you informed.

Don’t forget to call us and schedule your personal review either in person or by phone if you have not yet done so this year.  This is the perfect time to review your current financial situation as well as get your plan in place for the balance of 2017.  Call today!

God Bless,

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.

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