Financial Perspective: The Year of the Monkey

By: Ferguson-Johnson Wealth Management | January 12, 2017

“We live, my dear soul, in an age of trial. What will be the consequence, I know not.” -John Adams to Abigail Adams, 1774

John Adams’ words, written 243 years ago, appear to substantiate the claim that history repeats itself. Today, many Americans are concerned about the consequences of the current domestic and international environment, however you personally define them.

In no particular order, I have composed a selection of events that we, as a nation, have experienced during the past two plus centuries:

The War of 1812 The Irish Potato Famine
The Civil War The Abolition of Slavery
World War I First Transcontinental Railroad
World War II The Great Railroad Strike
The Korean War The Assassination of Lincoln
The Vietnam Conflict The Assassination of Garfield
The Iraq War The Assassination of Kennedy
The War in Afghanistan The Assassination of McKinley
The Mount Tambura Explosion The Holocaust
The Industrial Revolution The Great Depression
Tsar Alexander’s Assassination The Great Recession

We have not only weathered these events, but we have survived and flourished.

Financial Perspective: Wealth of Billionaires

Bloomberg News reports that as of December 27, 2016, for the year, the wealth of the world’s billionaires had increased 5.7%1 . No small potatoes in dollar terms. We are pleased to report that the DFA Global 60/40 Portfolio (DGSIX) finished up 9.2% for the year2.

It doesn’t take extraordinary resources already at your disposal to build wealth. Simple discipline and patience has proven to be effective throughout history.

Emerging Markets

The suite of Dimensional Emerging Market portfolios (DFEMX, DFEVX, DEMSX, and DFCEX) all experienced double-digit gains in 20163. This comes after several years of lacklustre performance from the emerging markets asset class.

We have long heralded the need for a diversified portfolio that includes all global markets. Despite what active mutual and hedge fund managers would like you to believe, no one knows what sector or asset class will be the next big performer or when it will happen.

Taking a diversified approach to a portfolio allows returns to be captured wherever and whenever they occur.

The Year of the Monkey

Well, that was 2016. A lot happened last year. 2017 is the Year of the Rooster. It seems fitting as we are certain to hear much crowing about the coming good/bad times.

We believe that 2017, or at least a good portion of it, should be the year of financial planning. The new Congress may (or may not) make significant changes in existing laws affecting income tax, mortgage deductions, estate planning, capital gains and numerous other items.

Our job is to help positions our clients to succeed, whatever may come down the pike.

We remain optimistic about this New Year and an age of trial.

Best wishes to each of you in the Year of the Rooster.

John, Derek, Jon, & Stacie

1 Metcalf, Tom & Witzig, Jack. “The World’s Richest Made $237 Billion This Year,” Bloomberg, December 28, 2016.
2 Source: Dimensional Fund Advisors, as of 12/31/2016.
3 Source: Dimensional Fund Advisors, as of 12/31/2016.

Investment advisory services offered through Ferguson-Johnson Wealth Management, a registered investment adviser. This newsletter contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this newsletter will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors.

Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Derek Johnson is an Investment Advisory Representative of Ferguson-Johnson Wealth Management, a values-based investment management firm located in Maryland. Derek Johnson can be reached at (301)670-0994. 

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