Financial Markets Commentary 4th Quarter 2016Submitted by Capital Strategies Financial Corporation on March 11th, 2017
The stock market rallied to new highs last quarter. Investors evidently shook off the concerns they had in the weeks leading up to the election and concluded that proposed lower corporate tax rates and reduced regulation were good reasons to be bullish. Investors were quite selective, however. They bought smaller companies and those more sensitive to an economic upturn enthusiastically, but they seemingly lost interest in larger, safer companies. The Russell 2000 small cap index rose 8.83% last quarter and many financial services companies performed extremely well on the quarter. On the other hand, the NASDAQ 100 Index rose just 0.09%, and dozens of funds in the large cap growth category lost money in the 4th quarter. Both Amazon and Facebook lost more than 10% as technology fell out of favor. So we have to look at the S&P 500’s 3.82% quarterly return as averaging out some spectacular performance and some very dismal returns.