It is amazing that at the time of this writing we find ourselves already into the 11th month of 2017. The returns in the markets this year have been likewise surprising. Coming into the year, we forecasted returns being somewhat subdued as we felt the strong rally at the end of 2016 would borrow some returns from this year. However, a weak dollar, strong earnings growth overseas, as well as a ten year bond yield that has actually declined has led to an extremely strong market this year.
Through the end of October, a 60/40 Domestic Portfolio was up 11.3%*. In addition, for the first time in a number of years, International Stocks have been a contributor rather than a detractor to account performance. Stocks outside the US are up between 22%** and 32%*** YTD depending on the benchmark.
On a different note, last week Chris Hammond from our team went on a due diligence trip to Davis Advisors in New York City. Ralph and Keith have made the trip in the past and all three of them have had similar impressions. Davis has a unique approach to managing money that has its roots in the fact that the family and company have over $2 Billion of their own dollars invested in the funds they manage. This has created an alignment of interests that is not replicated at many firms. Their focus on investing in well-managed companies trading at a discount, and holding them for the long-term has served clients well for many years.
The due diligence trip reiterated our conviction in them as one of the many managers that we utilize for client portfolios.
*60% S&P 500 Index / 40% Barclay’s Aggregate Bond Index as of 10/31/2017
**MSCI EAFE Stock Index as of 10/31/2017
***MSCI Emerging Markets Index as of 10/31/2017
**Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. No strategy assures a profit or protects against loss. Investing involves risk including loss of principal.**