2016 is coming to a close. What a year it has been.

Two major elections have surprised the world.

First, was the so-called ‘Brexit’ referendum in the United Kingdom to leave the European Union and the rather shocking election on Donald Trump as president of the United States.

I happened to be in London the week before the ‘Brexit’ vote, and the energy and emotional outcry on both sides of the issue were every bit as much or more than our presidential election.

To exit the European Union has and will have a huge economic impact on the Brits.

Just a month after the American presidential election, there is still a large measure of shock and emotion in the American electorate. Some people still can’t accept the results. The demand for recounts speaks volumes.

As the old saying goes, “so other than that Mrs. Lincoln….” Reflecting on the events of the year may be worthwhile.

The economy has been chugging along. Overall, the stock markets have turned in some solid numbers. Real estate sales are strong. Oil prices are relatively low. Interest rates are quite low.

For those seeking work, unemployment rates are the lowest in years. Car sales are up. What could be better than this?

John and I think stocks may be overpriced. Some standard indicators like the price/earnings ratio suggest that stocks prices are high. Results could be a correction in prices across the board.

Some analysts are suggesting that the recent rise comes from the anticipated corporate benefits that are likely to come from the Trump presidency. Things like lower corporate taxes, retention of manufacturing jobs from less overseas transfers and more.

Bonds have had a rough year. Bond prices have fallen in anticipation of increased interest rates by the Federal Reserve.

We think this will happen soon. If so, mortgages, car loans, and other borrowing will cost a little more. Although, the Federal Reserve nearly always raises rates gradually, which allow those impacted to adjust.

Our first mortgage had a 7.5 percent rate and we still made it work. How about you?

Local real estate prices seem to be strong, due in large part to the low mortgage rates and the increased value of homeowners trading up.

The international picture is not so clear.

If President-elect Trump’s statements come true, trade agreements may be changed; immigration policy may change; currency exchange rates may be volatile as well as the price of commodities like gold and silver. Hold on to your hats.

We live in interesting times as they always have been and will continue. The holiday season is a good time to reflect.

This may be a good time to review our personal, micro-economy. For many, the last year has been good. And even though the future is cloudy, we might consider ourselves fortunate to live in our wonderful Napa Valley and America.

Tom and John Mills are registered investment advisers and certified financial planners. Reach them at 254-0155, MillsWealth.com. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group (SWAG), a registered investment adviser.

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