2017 started with stocks climbing, bonds falling and the U.S. dollar strengthening in the belief that the new administration would accelerate economic growth via tax cuts, regulatory easing and infrastructure spending. But by quarter-end, the so-called “Trump bump” was giving way to a “Trump slump” that had undone much of the momentum for the various asset classes.
As our portfolios head into the second quarter of 2017, little has changed from where they stood at the end of last year. We continue to be positioned for an upswing in stock market volatility, given high valuations and the many uncertainties, both domestic and international.
Recent stock market volatility surprised some investors who’ve enjoyed the S&P 500’s roughly 9% rise since Election Day. We’re looking at two things — Trump administration initiatives and corporate earnings — as we consider the stock market’s future, but a little volatility isn’t a bad thing, as long as you take a long-term approach to investing.