It has been a great year for stocks. The other asset classes have been mixed, with US Treasuries hanging in there far better than many people predicted for 2017.
Probably the biggest news in financial areas has been the explosion of the valuation of BitCoin and the introduction of so many digital currencies. My sense is that this interest in Bitcoin is a manifestation of a global mistrust of fiat currencies and the governments that devalue them.
Gold has lost it’s place in the public mind as a hedge against financial disaster and devaluation of “paper money”. Now, “everyone” wants bit coin. Fortunes will be won, and lost, by people speculating in this new currency, although the upward trajectory might last for months or years to come.
I doubt bitcoin will be the long-term answer, although the blockchain technology underlying the currency is an idea that is here to stay, in my view. I don’t recommend more than a tiny speculative holding in bitcoin, and that only if you are a sophisticated, nimble, knowledgeable trader.
Our conservative portfolios have met expectations this year. As always, when people compare a diversified portfolio to the S&P 500 during a bull market, there is a temptation to feel left out of the big gains. However, nobody minds being in a diversified portfolio when the inevitable bear market in stocks comes along.
Nobody knows when that will happen. However, we can manage risk and adjust portfolios based on how the market behavior changes.
God bless you and yours during this festive and sacred season.