What We’ve Learned So Far in 2016

This year has been anything but normal. From a huge drop in equities to start the year, to an even bigger rebound, to low rates going lower, to “the economy is weak,” to the “economy is on a firm footing,” to “expect a rate hike next month,” to “never mind—no rate hikes till 2017.” Many are wondering what the final few months could hold in store as we head into the presidential election.

With such an unusual year, we went to our Research department to look for lessons learned and the big takeaways so far for 2016.

Please keep in mind these are just some opinions on what we’ve seen happen—and what may happen later this year. Here’s what the team had to say:

  • Just when you thought interest rates couldn’t go any lower, they did.
  • Over/underpriced asset classes may correct themselves very slowly or very quickly.
  • Record volatility may lead to historically non-volatile markets (and at some point, the other way around). This has repeated throughout history.
  • The S&P 500 during the year of the Monkey hasn’t been lower since the Great Depression. The zodiac year started on February 8 this year, right before a huge rally in equities. Go Monkey go.
  • The market climbs a wall of worry. I thought I already knew that, but I was worried that this time it wouldn’t work.
  • If sound financial advice helps keep a cool head in a crisis, it’s still a bargain.
  • United we stand, divided we still survive. (Brexit)
  • Driverless cars—they may not be that far away.
  • Diversification and active management can be cyclical. This has been a historically tough time to be an investment advisor. The good news is that, being cyclical, we may be on the path to a return to “normalcy” (if that exists) where diversification is a benefit and active management may assist in working toward your financial goals.

 

IMPORTANT DISCLOSURES
Past performance is no guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted.

There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to affect some of the strategies.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a nondiversified portfolio. Diversification does not ensure against market risk.
Because of its narrow focus, specialty sector investing, such as healthcare, financials, or energy, will be subject to greater volatility than investing more broadly across many sectors and companies.

Stock investing involves risk including loss of principal.

The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

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