The election of Donald Trump as the next US President led to a furious market rally in the 4th quarter. The S&P500 was up almost 6% in the last 2 months of the year, roughly half of the full year’s gain of 12%.
The S&P 500 achieved a 3.9% return in the quarter, with virtually all the gains coming in the month of July, as both August and September were basically flat. On the whole, the S&P has provided investors a 7.8% return on the year.
A lot has happened since our last update, however, the US equity market is stuck in the doldrums, as we expected. Given the upcoming election season, we will cover some of the fundamental economic issues facing the next President and our views on the latest external shock – Brexit.
As we expected, equity markets did poorly in 2015. The S&P 500 was down on a price basis and was up a bit over 1% when including dividends. Our equity accounts performed a touch better, up over 2% for the year, net of fees. Since inception in 2010 our accounts are up 14.7% annualized while the S&P500 is up 13%.
MARKET SUMMARY As we have discussed over the past couple of quarters, overall frothiness in the markets continued to reveal itself in the 3rd quarter, with the S&P 500 pulling back -6.4%. The combination of slowing domestic and global growth, a strong US currency,...
In our fourth quarter 2014 letter we discussed how valuations had become frothy and we were having difficulty finding suitable investments. Six months into the year our forecast has been borne out, the S&P500 is up roughly 1% through the end of the second quarter....