The Year 2015 In Review
Aaron Kolkman, CFP®, AAMS®
Troy Noor, CFP®, CFA
Ever wonder what the economic landscape will look like in a year? If we could (and to be clear, we cannot), here is a summary dialogue we may have with investors at year-end 2015.
To recap 2015, a number of important factors have impacted investor outcomes:
Long-term interest rates moved incrementally higher in 2015, while the Fed adjusted short-term rates upward during the year. As a result, the yield curve flattened slightly (though was nowhere near flat or inverted) pointing to a moderate growth picture in years ahead. Overall, fixed income investors experienced some relief in the form of rising yields rise and so capital continued a steady move “back to bonds” keeping downward pressure on long-term yields.
Although Quantitative Easing (QE) ended in October, 2014, maturing bonds were reinvested by the Fed (further suppressing long-term yields) and will likely continue to be in years to come. So while no new liquidity was injected into the US monetary supply, a looser monetary policy still reigns.
Inflation was a non-issue for investors with core CPI still below the Fed annual target of 2%.
With still historically low interest rates, a dovish Fed, and minimal inflation, domestic equity markets continued their upward price march albeit with increased volatility.Boosted by a strengthened U.S. GDP figure of around 3%, and lower energy prices, U.S. equity markets reassured investors globally that the U.S. has moved from recovery to real growth. Overseas, equity prices also saw through increased volatility to achieve moderate increases.Emerging countries also benefited from these global growth trends, especially from the loosening in global money supply.
Whether or not these points match consensus reflections in December, 2015, we encourage you to continually recalibrate your own expectations and rebalance your portfolio regularly. Meanwhile, please have a very Happy and Prosperous New Year!
For additional information, contact Aaron Kolkman at: (877) 664-2583 or email@example.com.
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