By Alisa Chatham Sakowitz
In like a lion, out like a lamb?
Not really. Last year came in like a lion and went out like a bull. An old-fashioned Market bull. 2017 seems to be off to a kinder and gentler start but 2016 wasn’t actually all that bad in the Markets. Culturally speaking – it was a different story.
While the Markets started 2016 off with the worst start to a year in Market history 1, we also saw the loss of pop icons such as music legends David Bowie, Glenn Frey (The Eagles), actor Alan Rickman (among the best bad guys of all time from the “Die Hard” series of movies to Harry Potter’s Professor Snape), Supreme Court Justice Antonin Scalia, author Harper Lee and former First Lady, Nancy Reagan. 2016 seemed not to be shaping up very well.
Markets were down 11% 2 by February 11th, 2016. Oil traded under $30 per barrel and the world economy seemed perched on a precipice. The lion roared in and scared away all the lambs. (We could say the bear growled in but, technically, in Market-speak, the indexes need to be down over 20% for the decline to be called a true bear. That and, around here, we don’t want to invoke old Ursus unless we have to.)
After the sun came out and Markets began to reverse course, the loss of those who contributed to our society’s enrichment continued. Patty Duke and Debbie Reynolds. Prince and Merle Haggard. Gene Wilder who kept his illness a secret from the world because he never wanted to mar a child’s memory of him with a picture of anything other than happiness. Fidel Castro and Eli Wiesel. Carrie Fisher. Arnold Palmer.
All of this caused us to really think hard about the good things that happened in 2016. As it happens, the Markets and the economy are among the brightest spots. From the lows of February 11th through the last trading day of the year on December 30th 3 the Market returned 22.4%. That qualifies as a verifiable bull! Not many, if any, of the experts were predicting that kind of an outcome but the Markets 4 hit a record high, wages rose and unemployment was at the lowest levels seen in 9 years5.
It can’t always be all about markets and the economy, so what else happened in 2016 that we can point to as a positive? Well, astronomers discovered evidence of a 9th planet. World hunger was at its lowest levels in 25 years and the Giant Panda was officially removed from the Endangered Species list6.
The roller coaster ride of 2016 is another reminder of why we stay invested, why we allocate assets across different types of investments and why we utilize the thinking of different experts. The Market is a great purveyor of surprise and this year only cements the need to stay focused on the positive. One never knows when the bull will buck his head up!
Commentary written by Alisa Chatham Sakowitz, Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. S&P 500 Index is a market index which focuses on large-cap segments of the U.S. equities market. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results. 2017-34472 Exp 1/18
- http://us.spindices.com/indices/equity/sp-500 (supplemented with First Data information)
- As measured by the S&P 500 Index
- As measured by the S&P 500 Index