4Q 2017 Quarterly Letter

We hope you had a wonderful holiday and we wish you all the best in 2018!
2017 was another good year for the stock market. Buoyed by a stronger economy and the prospect of a tax cut, markets hit record highs throughout the year. As we head into 2018, many pundits are forecasting better corporate earnings supported by lower corporate taxes. We agree that many companies will benefit from the tax plan and continue to be enthusiastic about the companies we own. We would add one caveat, however. The markets have had a tremendous run over the past year and many investments look fully valued. A pause in the market would be considered normal and healthy. We continue to look at your investments on a security by security basis and will make adjustments as necessary.
The Federal Reserve recently increased short-term interest rates for the third time in 2017. They have also indicated their intent to increase rates another three times in 2018. If accomplished, short-term rates that were near 0% 18 months ago, may approach 2% by the end of the year. For our balanced accounts, we continue to keep our maturities short, so we can take advantage of higher rates, should they materialize. Cash has become an earning asset once again.
The Tax Cuts and Jobs Act of 2017 was passed in mid-December and will apply to individuals and businesses in 2018. Revisiting our experience from the Tax Act passed in December 2010, we wanted to offer a few thoughts. Now that the Act has passed, it needs to be implemented, and implementing a tax plan can be a cumbersome process. Payroll and tax preparation software needs to be updated and tested, and that can take some time. This will complicate the process of calculating 2018 estimated taxes. Please prepare yourself for some possible delays around tax time this year.
Many clients have asked about electronic delivery of our quarterly statements. We are now able to provide our statements digitally in a secure format through our Black Diamond system. Please let us know if you have any interest, and we would be happy to set you up on the portal.

  • In accordance with S.E.C. regulations, a copy of Part 2 of our form ADV is available upon request.
  • Pursuant to the F.A.S.T Act, as our Privacy Policy has not changed since you last received it, a copy of our Privacy Policy is available upon request.

Connect your finances to what matters most

Experience our personal approach to investing