By Stephen Kyne
As we turn the page on another year, it’s time to take a look back at all that was, and prepare for what lies ahead. For the economy at large, 2017 was a stellar year and we think there is more to look forward to in 2018.
We’re beginning to feel a bit like a broken record when we say that the year has been better than we expected, and we expect the next year to be good as well. Unfortunately, since 2009, many investors have remained on the sidelines and have missed the opportunities that the economy presented since the recession. The good news is that we think there’s still room to run in this expansion—even those shy investors have time left to participate.
This time last year, we expected that U.S. stock indices could easily provide returns in excess of 10 percent, and boy were we right!. As of Dec. 29, the Dow sits up about 25 percent, the S&P is up 18 percent, and the NASDAQ is up a whopping 29 percent for the year, while bond indices have returned in the neighborhood of 2 percent (barely pacing inflation).
Clearly, equity (stock) investors have been rewarded in 2017, as they have been ever since March of 2009. Loosening regulations, lowering corporate taxes and increased consumer activity have all been among the factors that contributed to an environment which is producing record corporate profits and ultimately the beneficiaries have been stock investors.