As we enter the new year, there seems to be a lot of nervousness regarding the markets, the economy, etc. Ironically this seams to be a common theme at this time of year. As I look back at last year at this time, here is what I observed. The Federal Reserve just raised interest rates for the first time in 9 years. They were expecting to raise rates an additional 4 times in 2016. This had a lot of people expecting a significant drop in the stock market. This along with a general election had many people feeling pretty depressed regarding 2016. As we all know now a lot has happened since December 2015.
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It’s interesting in that in one of the most energized presidential elections in recent memory that the markets are pretty much flat for the year. The beginning of the year started with a thud with oil dropping down to around $27 per barrel. The stock market followed oil down. Even though the economy has not increased much so far this year, oil prices have recovered to around $50 per barrel.
Welcome to 2016. This has been one of the craziest starts to a year that I have ever seen. One week it is 50 degrees outside and the next it is 15 degrees. Six inches of snow fall one day and three days later you can see my lawn. This presidential election is more bizarre than any I have ever seen. The most extreme candidates from both parties are amongst the most popular.
As we begin the New Year, I want to thank you for the trust and confidence you have placed in the team here at ChoiceOne's Investment Center. Last year was one of challenges as the markets were very volatile. We also went thru challenges here as Kelly Potes was promoted to be President of ChoiceOne Bank and our long time team member Elizabeth Ford took a new role in bank operations. These transitions added extra work for us, however in November we added Elizabeth Dodgson to our team.
Different types of investments are subject to different types of risk. On days when you notice that stock prices have fallen, for example, it would not be unusual to see a rally in the bond market. Over the long run, a combination of investments that are loosely correlated may provide greater diversification, help manage portfolio risk, and smooth out investment returns.
Learn more about life insurance beneficiary mistakes to avoid and how to protect your Social Security number from identity theft. Also read about the advantages of tax deferrals when it comes to saving for retirement.