Another Year Passes…

Dear Friends,

Time Flies! In a year of hyperbole, that may be the biggest understatement!

2017 produced three major surprises. First and foremost, of course was the performance of the overall stock market. My “Fearless Forecast” – a tongue in cheek exercise our founder Jack Nelson started decades ago on the Sunday radio program “Dollars & Sense” that I continue to host – was not nearly this optimistic with my DOW prediction for 2017 at a mere 23,000! Needless to say, our consistent investment approach that utilizes predominantly large blue-chip companies generated us all very good investment results this year.

Second, there was very little volatility in achieving this performance. In fact, 2017 is on track to be the first year ever in which the S&P 500 will have a perfect record of no negative months.

Third, there was a significant Christmas gift to all in the form of large tax cuts. Regardless of what you may have heard in the media, this tax cut unequivocally puts more money in your pocket. To be determined, of course, is its effect on the deficit and future generations. I am glad we all don’t run our personal finances the way the federal government operates!

I have no doubt that 2018 will have its share of surprises as well. There are always headlines – new and old – that will be dissected thoroughly and whenever possible stoked to create maximum fear. I suspect 2018 will have more short-term headline driven market volatility than 2017 – it can’t help but not given the perfect record of 2017! The obvious volatile example is North Korea which continues to smolder. The less than obvious example is the task in front of the Federal Reserve as they try to increase interest rates while monitoring the proper growth level for an economy that shifted into a higher gear in 2017. Their task, along with many other central banks, of continuing to unwind the post-2008 financial response is a daunting one at best.

However, we believe that the economic trends that started to accelerate in the second half of 2017 will carry over to 2018. 2018 would be hard-pressed to match the performance of 2017, but the year should be a decent one for investors as consumers start to spend more, corporate profits continue to increase, and the immediate effects of the tax cut spur further economic activity.

Be sure to listen to my radio show “Dollars and Sense” this coming Sunday at 9AM on 540 AM/102.5 FM for my official “Fearless Forecast” for 2018. If you miss the show on Sunday, it will be posted to Facebook, Twitter, Linked In and our website www.NelsonFinancialPlanning.com.

The start of a new year begins anew our series of regular client meetings at the Country Club of Orlando located at 1601 Country Club Drive in Orlando. Our February 6, 2018 dinner meeting at 5:30PM features a return of Joe Valencia from American Funds. This should be an informative way to start the year off as Joe will be providing a 2018 Outlook. Bill Cass of Putnam Investments returns for our March 20, 2018 dinner meeting at 5:30PM. This will be a timely discussion as well featuring both a current tax and economic analysis.

Please be sure to RSVP to these events either by email or contacting the office at 407-629-6477 to reserve your space. Feel free to invite your friends to these meetings as well!

The start of a new year also means that tax season is around the corner. The recent tax cut only affects 2018 returns and beyond so your upcoming returns should follow the same pattern of the prior year return. In our usual mid-January letter, we will include a special Top 10 Tax Changes for 2018 to help you begin to prepare for these sweeping tax changes.

Enjoy the New Year’s Holiday and I look forward to seeing you in 2018!