Investments: 2016 In Review

As we look back at 2016 and ahead to 2017, we’ll leave the political discourse and analysis to others and focus our comments within our circle of expertise: the creation of evidence-based financial plans tied to our client’s most important long-term goals.

The year 2016 began with what have been termed the worst first six weeks in equity market history – the S&P 500 declined more than eleven percent from its 2015 close through February 11, 2016. In June, the  market went down nearly six percent in a day and a half following the Brexit vote. There was a moment, somewhere around 2:00 am eastern time after the presidential election, when we saw the futures on the Dow Jones Industrial Average down 800 points!

Yet despite all that unnerving market volatility, the S&P 500 closed out the year at 2038. With dividends of about two percent, the market’s total return this volatile year was roughly 12 percent. In a sense, then, the equity market put on a tutorial in 2016, highlighting the wisdom of tuning out shocking current events and the attendant volatility. During such episodes, it seems to us that the best investment advice we can offer is always, “Turn off the television.”

2016 confirms our long experience that most successful investing is goal-focused and planning-driven, while most of the failed investing we’ve observed is market-focused and short-term performance driven. The really successful investors we’ve known were acting continuously on a plan – tuning out the fads and fears of the moment – while the failing investors we’ve encountered were continually (and randomly) reacting to economic and market “news.” 

While we continually monitor portfolios against relevant investment benchmarks*, our essential principles of portfolio management in pursuit of our clients’ most important goals are fourfold. (1) The performance of a portfolio relative to a benchmark is largely irrelevant to financial success. (2) The only benchmark we should care about is the one that indicates whether you are on track to accomplish your financial goals, (3) Risk should be measured as the probability that you won’t achieve your financial goals and (4) investing should have the exclusive objective of minimizing that risk to the greatest extent practicable.

All of us at Align Wealth Management wish you and yours a happy, healthy, peaceful and prosperous New Year.

Thanks for taking a look!

P.S. All Align portfolios were up solidly last year as they have been over the longer term. For current performance of our four most popular strategies, feel free to give us a call at 727-455-0033 or email us at

Article by Brian Puckett, JD, CPA, PFS, CFP®

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *