Quarterly Market Report: 4Q 2017
In a rare occurrence, fourth quarter 2017 saw pretty much every part of the public markets rise, which is reflected in your TFP portfolios. The Dow Jones Industrial Average (an index of the 30 largest public companies in the U.S.) broke the 25,000 mark for the first time recently, continuing this run into the first quarter of 2018. Markets are incredibly complex, so there is no one contributing factor to this positive run that has been going on for some time.
However, just as the tides ebb and flow, we can expect a pull back in market prices at some point. A correction (a drop of 10% or more) in the stock market is a normal occurrence, so don’t be surprised if it happens. In the coming days I will take profits and reinvest in undervalued parts of the portfolio (buy low / sell high) as part of my normal process of preparing for downturns. As always, I will continue to monitor the markets and make adjustments as needed.
Finally, Dimensional Fund Advisors (DFA), who comprises core holdings in our portfolios, wrote a piece about bitcoin after the mania surrounding it recently. I’ve included it along with my personal commentary.
As always, thank you for your continued trust in Transformative Financial!
Patrick King CFP®