Most milestones of the human journey, good or bad, are foreshadowed by the sound of a ringing.”      Mitch Albom

There were plenty of milestones ringing the bell on Wall Street in the first quarter of 2017. The DOW crossed both the 20,000 and 21,000 levels for the first time. The index closed at record highs for an incredible twelve days in a row in late February. A few weeks later, the DOW fell down eight days in a row… its longest losing streak since 2011.[1] Will these streaks and milestones continue?

Market Stats for Q1: The S&P 500 finished the quarter up 6.1%, the DOW added 5.1% and the big major index winner was the NASDAQ, higher by 10.1% for the first quarter of 2017. The best sectors in the first three months were Technology +12.6%, Healthcare +8.4%, Consumer Discretionary +8.4%, Consumer Staples +6.4%, and Utilities +6.4%. The Energy sector was down 6.7%. Telecom lost 4%. A 10-year Treasury will yield you 2.4% and a new 30-year fixed mortgage interest rate today is 4.3%.[2]

The Academy Awards produced a milestone misstep as the real winner was nearly stolen away by Bonnie and Clyde (aka Faye Dunaway and Warren Beatty). It wasn’t “La La Land” as Faye proudly proclaimed; the best picture was really “Moonlight”. Emma Stone won for best actress and Casey Affleck was best actor.

March Madness: Roy Williams and the North Carolina Tar Heels are NCAA college basketball champs. My brothers and I bumped into these big guys in Memphis at the Sweet Sixteen while having BBQ brisket and ribs. No doubt, our good luck rubbed off on the Heels. In women’s NCAA basketball, the incredible 111 game win streak finally came to an end for UConn and Coach Geno Auriemma.

 “I can hardly wait for April 15th!” our client exclaimed. In 43 years in financial services, I have never heard these words. Of course, they were describing the day her building permits would finally arrive to finish construction on her house. Since tax filing day this year falls on a weekend, the 2017 tax day is April 18th.

Five Tax Tips for 2017: 1. File electronically (speed up your refund and save a tree); 2. Be generous with your gifts to charity; 3. Use higher education expenses for tax beneficial treatment; 4. Maximize your IRA and retirement contributions; 5. Protect your ID (consider an IP PIN for your tax return).[3]

Taxes continued: If you are making contributions to your retirement plans, please be sure that your checks arrive in our office by Tuesday, April 12th. Traditional IRA and ROTH-IRA contribution maximums are $5,500 for ages under 50, and $6,500 for over age 50. There are phase-out income limits for deductions…so be sure to check with your accountant for your most advantageous contribution. If you are not happy with your CPA or accountant, or you are finally finished with doing your own taxes…we can introduce you to someone who might save you money and make your life easier.

Warren Buffett published his annual Berkshire-Hathaway letter to shareholders last month. Here are a few gold nuggets from the Sage of Omaha: 

  • American business, and consequently a basket of stocks, is virtually certain to be worth far more in the years ahead. Innovation, productivity gains, entrepreneurial spirit and an abundance of capital will see to that. Ever-present naysayers may prosper by marketing their gloomy forecasts. But heaven help them if they act on the nonsense they peddle.
  • Many companies will fall behind and some will fail. Winnowing of that sort is a product of market dynamism. Moreover, the years ahead will occasionally deliver major market declines and even panics that will affect virtually all stocks. No one can tell you when these traumas will occur – not me, not Charlie (Munger), not economists, not the media. Meg McConnell of the New York Fed aptly described the reality of panics: “We spend a lot of time looking for systemic risk; in truth, however, it tends to find us”.
  • During scary (stock market) periods, you should never forget two things: First, widespread fear is your friend as an investor because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted. Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively financed American businesses will almost certainly do well.

At Pacific Sun Financial, we have continually tried to advance our technology to serve our clients more efficiently and for mutually profitable results. Today, this technology includes a high degree of cyber-security safeguards and constant awareness. The protections against hackers and identity thieves have been steadily in place and upgraded regularly in coordination with Charles Schwab, Morningstar, and our other affiliates. We will always remain vigilant in protecting your assets.

We have also embraced the technological benefits of robo-investing but we are not concerned that the robot will replace our service. As one advisor put it, “When a client calls up and says his father just passed away and there is a large estate to transfer…that’s not something you just plug into Siri.”[5]

We would like to thank Gary, Dale, John and Bridgette for introducing us to new clients during the first quarter. We look forward to another exciting and profitable year with all of you in 2017.

Today’s the day,

Mitch Fisher

[1] CNN 3/31/17 [2] J.P. Morgan Asset Management 4/3/17 [3] [4] Berkshire-Hathaway 2016 Annual Report [5] Robert Moore, Financial Planning Magazine February 2017