January 6, 2017

Q4 2016: Quarter in Review

The U.S. election seemed to dominate capital market movement during the fourth quarter of 2016, as investors first withdrew from risk markets leading up to the decision then embraced them after Donald Trump succeeded in defeating Hillary Clinton to become America’s 45th President. While strength in the U.S. dollar masked otherwise robust global equity market returns in the aggregate, our tilts to relatively inexpensive (known as, “value”) and to small-capitalization stocks boosted portfolio returns, versus the broader markets. While equity markets were positively affected by optimism regarding a Trump administration, fixed income markets were adversely affected by concerns regarding potential policy shifts. Investors began to anticipate higher macroeconomic growth mixed with higher inflation and higher domestic government debt, as well as a less accommodative monetary policy stance from the Federal Reserve. Longer-maturity bonds suffered the most, while corporate exposures fared better on account of the potential for faster growth to boost business activity and profit.


Recent Commentaries

120 Newport Center Drive
Suite 100
Newport Beach, CA 92660
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram