2017 Mid Year Market Review

The financial markets have continued the surge that began in 2009 in the height of the Great Recession.

As of June 30, domestic stocks have advanced in the neighborhood of 9% leading many pundits to believe that US stocks are “overvalued” and in need of, at least a modest correction.

Meanwhile, foreign stocks have finally shown signs of life and have thus far advanced a whopping 14% in 2017.  It seems that fears are beginning to wane in response to the IMF suggesting that Eurozone growth could be higher than originally expected post-Brexit.

Unfortunately for investors (or fortunately for borrowers), interest rates remain miserably low. Annual yields on 5 and 10 year treasuries are a mere 1.9% and 2.3% respectively.

Maintaining a diversified approach in the bond portion of your portfolio has helped as total returns so far in 2017 have averaged in the neighborhood of 2%.

So what’s next for the financial markets?

Although outlooks vary, there is no shortage of opinions on where the financial markets are heading.  Here are a few notable headlines just from the last 6 months or so:


The Outlook is Great!

“Tech Stocks Soar to New Highs as Global Stocks Rally”

“Eurozone Confidence Hits Post Crisis High”

“Home Sales Jump to Near Boom-Era Levels”

“US Job Openings Hit New High”

“Unemployment Falls to 16-Year Low”

“IMF Upgrades UK 2017, 2018 Growth Forecast as Brexit Fears Ease”

The Outlook is Terrible!

“UK Economy Slows Sharply Ahead of Election, Brexit Talks”

“Global Bonds Sell Off, Sparking Fears of Further “Taper Tantrum”

“US Oil Falls into Bear Market Amid Worries Over Supply Glut”

“IMF Lowers Forecast for US Economy Amid Rising Policy Uncertainty”

“Global Stocks Post Strongest First Half in Years, Worrying Investors”


The fact of the matter is that no one knows when the next market correction will happen, or the direction of the stock market in the second half of the year.

However, one thing that can be said with confidence is that those investors who maintain an investment strategy that is long term focused, grounded in financial planning, and globally diversified will have a higher probability of meeting their investment goals than those who seek alternate solutions.  We hope that each of you have a great summer!

STOCK INDEXES 2017 3 Yr. 5 Yr.

Dow Jones Ind. Avg. 9.4% 11.0% 13.5%
S&P 500 Index 9.3% 9.6% 14.6%
(large company index)
Russell 2000 Index 5.0% 9.6% 13.7%
(small company index)
MSCI ACWI Ex-USA 14.1% 0.6% 4.4%
(foreign company index)


Short Term Inv. Grade Bonds 1.2% 1.1% 1.3%
Intermediate Govt. Bonds 1.2% 1.3% 1.0%
High Yield Bonds 4.1% 3.0% 5.7%
Global Bonds 4.4% 0.3% 1.8%

*Source: Morningstar