A Word from Jeff

2017 has certainly started with a bang, and kept the Trump rally intact, despite some scary days leading to mid February. We still think US stocks are at unsustainable valuations, and that a correction is coming. We stress that we are long-term bullish on the US economy and stocks, and that any dips (and we are expecting a significant dip) should be considered buying opportunities for those in cash. That said, while US stocks are quite pricey, this is not so around the world, where many tempting bargains await. Emerging markets – China, South America, and other developing economies – sport some of the cheapest prices around, with many selling at record lows despite sharply improving outlooks. Emerging markets have gone up nearly three times as much as the S&P 500 as of February 6th, and Camarda believes they have a long way to go, indeed. Ditto for much of the rest of the non-US world, including much-maligned Europe. We expect the dollar to soften later this year, boosting non-US stock returns in dollar terms. For these reasons we continue to be excited about the rotation of client accounts into globally diversified portfolios like our new AIMS+ allocations, which include the well-regarded DFA funds. We see the US economy continuing to improve, with employment, inflation, and interest rates continuing to rise. We also expect tax reform this year, with a sharp drop in capital gains and income tax rates for many if not most.