It was a frustrating year for many investors. The market as a whole went sideways. Bonds earned around ½% for the year, while the S&P actually lost almost 1%. Cash pays near zero interest at the banks, while many foreign investments and commodities lost significant amounts (China & Oil)
If you look at the glass half empty, then you will be critical about all of risk and volatility you were exposed to. You may think you would have been just as well off if you had sat your money in the bank all year.
If you look at the year as the glass is half full, then you will be optimistic about the good change of events that is occurring. Oil prices and thus gas prices are at 10 year lows. This can and will be a major driver for the US economy in the coming years. Everything we buy will be a little cheaper and we will continue to spend less money at the pump.
The Fed also raised their interest rate target for the first time in 9 years. This is a good indication that the economy is standing on its own two feet and the interest that you earn on cash or similar low risk investment will eventually start increasing.
Whether you are a glass half empty or a glass half full person, it doesn’t really matter. They are both right. It was a wasted year for returns, but we go into 2016 with optimism of a healthy economy.
So far this year the market has been skittish. China is still lowering their economic projections which have a ripple effect in this country. But our fundamentals are strong and not based on China, so these drops are not indications of worse news to come. In fact, they are good buying opportunities for the disciplined investor.
Only time will tell, but I optimistically look for 2016 to be a positive year for investors.