The financial markets ended 2016 on a strong note, defying most market prognosticators predicting doom and gloom at various times of the year. The first “Sell Everything” call of 2016 was by RBS on January 11, with many more recommendations from other pundits to reduce investment risk and “get out of the market”. Equity and commodity markets continued to decline until midway through the first quarter before staging a very strong rally. From the market bottoms and depths of despair in the first quarter, domestic equity markets moved to one all-time high after another and finished the year on a euphoric note following the unexpected election of Donald Trump. If you had sold in January, you potentially missed a 45% gain in small cap stocks, 25% gain in large cap stocks and 31% gain in emerging markets stocks. Once again, following the pundits was not a good investment strategy.
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