One of the biggest questions clients are asking right now is “Are stocks expensive?” And the short answer is yes – based on historical comparisons, valuations on U.S. stocks are definitely high. According to research from the Leuthold Group, as of 12/31/2016 the S&P 500 trailing price to earnings (P/E) ratio was in the 90th percentile (meaning stocks have only been more expensive 10% of the time) of valuations going back to 1920. Does that mean stock prices need to fall in order to get back to more reasonable valuations? Not necessarily…

Presidents’ Day has long been a time to reflect on the many achievements of the United States’ greatest leaders, thinkers and architects of democracy. Originally celebrated on February 22nd to coincide with the birthday of the country’s first head of state, George Washington, Presidents Day was later shifted to the third Monday in February as part of 1971’s Uniform Monday Holiday Act, an attempt to create more three-day weekends for the nation’s workers. While several states still have individual holidays honoring the birthdays of Washington and Abraham Lincoln, many now view this day as one to celebrate all U.S. presidents past and present. Our country’s leaders have all taught us valuable lessons. We share with you today three simple considerations from ‘Honest Abe’ reminding us honesty seeds trust in our homes, workplaces, worship spaces, and communities, and most importantly, is the keystone of our credibility as leaders. 

Earlier this week we held our regular “Portfolios at Panera” and “Markets on Marconi” events where the primary discussion topic was how we were allocating portfolios as we start 2017. One of the key discussion points was our current target “overweight” to stocks within our Harvest strategy and how we are structuring that allocation across U.S. and foreign stocks, and large and small companies. A question which came up at both events was “Where do you think the stock market will finish 2017?” 

Last Thursday, a celebration of life service was held for Susan Zanner. While guests came to grieve their loss, they also came to celebrate Susan’s ultimate victory. Printed in the order of service was a poem we share with you today written by Linda Nielsen titled A Gift. Susan discovered her cancer was a gift; a gift that came to her in many ways, through many people, over many months and years as she walked the path so many have walked.

During the first three weeks of the year, the financial markets have been relatively calm.  If there is any “trend” we have observed, it is the simple fact that some areas of the market which rallied the most after the Presidential election in 2016 are now relative laggards in 2017, and areas of the market which performed the worst are now the market leaders.  The numbers are not huge – most asset class returns are between -1% and 3% so far in 2017, but today we are sharing three examples of what we are seeing.

Charitable giving continues to uniquely define the United States when compared to other nations.  With many of our clients giving considerable sums to charities each year, we thought our readers would be fascinated and inspired by the following excerpts taken from an article entitled “Philanthropy’s 3 Percent Solution,” written by Adam Meyerson, president of the Philanthropy Roundtable and published in Philanthropy Magazine.

Earlier this week, we ended our 2016 monthly series of “Portfolios at Panera” talks with a market recap event at The Joseph Group’s offices.  We reviewed each major asset category and talked about “What did we do (in portfolios in 2016)?” and “What is our view (outlook for each asset class in 2017)?”  One of the items we discussed was the underperformance of foreign stocks relative to U.S. stocks since the election and the answer was surprising.

As widely anticipated, earlier this week the Federal Reserve increased its target for short-term interest rates by 0.25% (from 0.25% to 0.50%).  The move was well telegraphed – prior to Wednesday’s meeting, the market (Fed Funds futures) were pricing in a near 100% chance the rate hike would happen. What remains uncertain though is the Fed’s path for rate hikes in 2017. What does all of this mean for bonds?  After all, when interest rates go up, bond prices go down. 

Undoubtedly the life of John Glenn has inspired all of us. In memory and honor of this man’s humble and generous spirit, we share a reflection by Columbus Foundation President and CEO Doug Kridler. Godspeed, John Glenn!

Though the story shared with you today may have some age, its message is timeless. Published on December 14, 1982 was the story winning first place  in a popular magazine’s contest, “My Most Moving Holiday Tradition.” It has not only encouraged families to adopt the tradition in their own home, but also inspired an Atlanta, Georgia family to start Giving101, a nonprofit passionate about unleashing the amazing power of contagious giving. May we remember throughout the season to give from the heart and remember Mother Teresa’s words, “It’s not how much we give, but how much love we put into giving.”