Happy New Year!
2019 was a great year for equity investors. Most indices were up over 20% and some over 30% for the year. The fact that most of the increase came from multiple expansion and not earnings growth is a concern for us going forward. The heavy lifting will be on the shoulders of companies to increase their earnings for stock prices to continue rising. There are several indicators that lead us to believe it will be difficult to see the same growth in 2020 and we continue to encourage investors to remain diversified in their holdings. A perfect example of why this is important can be seen in the S&P 500. Technology companies comprise around 30% of the S&P 500. This large % allows for these companies to bully the S&P 500. Check out this startling statistic...
"Apple and Micorsoft, which surged 85% and 55% this year respectively, together accounted for nearly 15% of the S&P 500's advance in 2019, which is more than the next eight largest contributors combined." -iMore, December 31, 2019
This can be a great thing on the way up, and horrible thing on the way down.
LOWER FEES!!! -- As many of you are aware, we partnered with DFA mutual funds (Dimensional Fund Advisors) several years ago. We did this due to DFA's unique approach to building and managing portfolios coupled with the fact that their fees were among some of the lowest in the mutual fund world. We are happy to announce that on 2/28 of this year, they will be lowering their fees again on 77 of their funds. We welcome this news as it will keep more money in our client's hands!
Quarterly Market and Economic Update - Wednesday, February 12th, 2020
We will be highlighting and updating everyone on the current market situation and what we see coming for 2020. There are a lot of external issues that can, and will, affect the market. We will also be providing an update to everyone on the SECURE Act and how it could affect your family estate plan.
Your WaterFront Team