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Goodbye to the Year of the Monkey

Posted on: January 12, 2017 |

“We live, my dear soul, in an age of trial. What will be the consequence, I know not.”

-John Adams to Abigail Adams, 1774

John Adams’ words, written 243 years ago, appear to substantiate the claim that history repeats itself. Today, many Americans are concerned about the consequences of the current domestic and international environment, however you personally define them.

In no particular order, I have composed a selection of events that we, as a nation, have experienced during the past two plus centuries:

The War of 1812
The Civil War
World War I
World War II
The Korean War
The Vietnam Conflict
The Iraq War
The War in Afghanistan
The Mount Tambura Explosion
The Industrial Revolution
Tsar Alexander’s Assassination
The Irish Potato Famine
The Abolition of Slavery
First Transcontinental Railroad
The Great Railroad Strike
The Assassination of Lincoln
The Assassination of Garfield
The Assassination of Kennedy
The Assassination of McKinley
The Holocaust
The Great Depression
The Great Recession

We have not only weathered these events, but we have survived and flourished.

Wealth of Billionaires

Bloomberg News reports that as of December 27, 2016, for the year, the wealth of the world’s billionaires had increased 5.7%1. No small potatoes in dollar terms. We are pleased to report that the DFA Global 60/40 Portfolio (DGSIX) finished up 9.2% for the year2. It doesn’t take extraordinary resources already at your disposal to build wealth. Simple discipline and patience has proven to be effective throughout history.

Emerging Markets

The suite of Dimensional Emerging Market portfolios (DFEMX, DFEVX, DEMSX, and DFCEX) all experienced double-digit gains in 20163. This comes after several years of lackluster performance from the emerging markets asset class. We have long heralded the need for a diversified portfolio that includes all global markets. Despite what active mutual and hedge fund managers would like you to believe, no one knows what sector or asset class will be the next big performer or when it will happen. Taking a diversified approach to a portfolio allows returns to be captured wherever and whenever they occur.

The Year of the Monkey

Well, that was 2016. A lot happened last year. 2017 is the Year of the Rooster. It seems fitting as we are certain to hear much crowing about the coming good/bad times.

We believe that 2017, or at least a good portion of it, should be the year of financial planning. The new Congress may (or may not) make significant changes in existing laws affecting income tax, mortgage deductions, estate planning, capital gains and numerous other items. Our job is to help positions our clients to succeed, whatever may come down the pike.

We remain optimistic about this New Year and an age of trial.

Best wishes to each of you in the Year of the Rooster.

John, Derek, Jon, & Stacie

1 Metcalf, Tom & Witzig, Jack. “The World’s Richest Made $237 Billion This Year,” Bloomberg, December 28, 2016.
2 Source: Dimensional Fund Advisors, as of 12/31/2016.
3 Source: Dimensional Fund Advisors, as of 12/31/2016.

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