The year 2016 proved that Yogi Berra was correct when he said: "It's tough to make predictions -- especially about the future." Unexpected events affected the financial markets ... unexpectedly. But at the end of the year, the results were good for investors.
The Standard & Poor's 500-stock index finished the year up 9.4 percent, while the Dow Jones Industrial Average closed up 13.5 percent. The Dow brushed up against the 20,000 milestone, but retreated after hitting a record high of 19,888 on Dec. 20.
Edward Jones financial adviser Scott Burton said in the press release, "2016 was certainly one for the books. Early in the year, we saw a real slowdown in China's spending, oil prices fell and there were fears of a recession. The market dropped sharply, but then it bounced back. Then, in the summer, we had Brexit and a lot of people thought that might lead to a lengthy downturn -- but the market bounced back again. And on the night of the presidential election, the futures market fell pretty far, but then the actual markets rallied and just kept moving up for the rest of the year."
In fact, 2016 marked the eighth consecutive year of positive returns -- the second longest winning streak in history. And the gains have been sizable, as stock prices have more than tripled since March 2009.
As the year drew to a close, the Federal Reserve raised a key interest rate by a quarter point -- and, just as importantly, the Fed indicated it may raise rates three more times in 2017, which would mark the highest number of annual increases since 2006. From an investor's standpoint, these rate hikes can be interpreted in different ways. On one hand, when the Federal Reserve raises rates, it's essentially a "vote of confidence" in the economy's health and its ability to grow; on the other hand, higher rates could adversely affect certain market sectors.
In looking ahead, 2017 could be another interesting year for the financial markets. If the Trump administration carries through with its promises for a big increase in infrastructure spending, some sectors will benefit. Tax reform and regulatory changes could also affect the economy. However, with change comes uncertainty, so investors should not be surprised to see market volatility. In any given year, it's not unusual to see a "correction" -- a market pullback of at least 10 percent -- and 2017 will likely be no different in that regard.
"Even with changes in Washington, the financial markets will always be governed by fundamentals, like corporate earnings, stock valuations and other factors," said Burton. "Investors shouldn't radically alter their strategies based on government policies. At Edward Jones, we stress the importance of staying invested in all types of markets -- good, bad or in-between. We believe that investors should buy quality investments, hold them for the long term and make adjustments, as needed, in response to changes in their lives."
This long-term focus is reflected by the number of accolades the firm consistently earns. In 2016, the company received the following recognition and awards:
• Ranked No. 10 on Fortune magazine's "100 Best Companies to Work For" list -- This is the firm's 17th year on the prestigious list.
• Ranked No. 2 on the Best Workplace for Parents list -- This ranking, issued by the Great Place to Work organization, considered results from more than 120,000 surveys of U.S. companies across a range of industries.
• Ranked as a "best workplace" for women, millennials, Gen Xers, those approaching retirement and those in finance and insurance -- This ranking was also issued by the Great Place to Work organization.
• Received a perfect score on the 2017 Corporate Equality Index -- Administered by the Human Rights Campaign Foundation, the CEI is a national benchmarking survey on corporate policies and practices related to LGBT workplace equality.
• Won the "Technology" category for large broker/dealers at the 2016 Wealth Management.com Industry Awards -- This award recognized Edward Jones for being the first large financial services firm to introduce two-way texting with clients.
• Named the top financial services website -- Edward Jones received this accolade from the Web Marketing Association's 17th Annual Web awards. Industry professionals named the company's website as the best in financial services in terms of ease of navigation, straightforward design and available options for users.
• Named the top full-service investment firm for key aspects of client experience -- Research firm Hearts & Wallets named Edward Jones as the top full-service investment firm for providing clarity about fees and unbiased and understandable advice and service.
Taken together, the awards reflect Edward Jones' commitment to the 7 million investors it serves.
Burton's office is located at 5500 Central Ave. Suite C, Hot Springs. His phone number is 501-525-0769.
Edward Jones, a Fortune 500 company, provides financial services for individual investors in the United States and, through its affiliate, in Canada. Every aspect of the firm's business, from the types of investment options offered to the location of branch offices, is designed to cater to individual investors in the communities in which they live and work. The firm's 14,000-plus financial advisers work directly with more than 7 million clients. Edward Jones, which ranked No. 10 on Fortune magazine's 100 Best Companies to Work For in 2016, is headquartered in St. Louis. The Edward Jones website is located at http://www.edwardjones.com, and its recruiting website is http://www.careers.edwardjones.com. Member SIPC.
Business on 02/13/2017