Investment Commentary from John H. Robinson

January 15, 2016

2015 – Year in Review

2015 will go down as a dud for investment returns. The S&P 500 Index, as the measure for large U.S. stocks, finished the year up 1.4%. The Russell 2000 index, which is regarded as a benchmark for small cap U.S. stocks, finished down 4.5%. Foreign stocks, as measured by the MSCI EAFE Index, ended the year flat. Commodities, led by the tanking price of oil (pun intended) and emerging markets fared significantly worse than the broader markets, while the Wilshire REIT Index was among the top performing sectors – up a whopping 4.5%. Throughout the year, the markets experienced the usual range of ups and downs, and ended with nothing to show for all the drama.

2016 – An inauspicious start

At the risk of stating the obvious, 2016 is not off to a particularly great start either. Through this writing, the S&P 500 Index and MSCI EAFE Index are all down 8-9%, while the Russell 2000 Index is down just over 11% through January 15th.

Keeping Things in Perspective

Suffice to say that I have philosophical differences over the merits of market timing with the nitwit bank analyst last week who trumpeted “Sell Everything!”  Having lived through down market unpleasantries many times over the past three decades,  I offer the following tidbits:

  • Sometimes stocks go down. This is one of those times.
  • Sometimes stocks go down a lot. This may turn out to be one of those times. Or it may not.
  • One of the best ways to make one’s nest egg last longer is to avoid selling when stocks are down.
  • To avoid selling stocks when they are down, don’t keep your whole portfolio in stocks.

The views expressed herein are solely those of the author.  Nothing in this piece  should be construed either as a solicitation or as a recommendation to purchase or sell securities.

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J.R. Robinson is the Co-founder of Nest Egg Guru, a web-based application that helps financial advisors stress test their clients' retirement strategies. He is also the Founder/Owner of FInancial Planning Hawaii. J.R. has written or co-authored numerous papers for peer-reviewed Academic and Professional Journals and his articles and commentary regularly appear in nationally syndicated financial news media.