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March 2017 archive

March 2017

Now that the dust is beginning to settle from the results of the U.S. election, I thought it would be a propitious time to take a step back and review the recent past, as well as to take a look ahead. 2016 marked the fourth consecutive year during which U.S. equities out performed the rest of the world. With the dollar appreciating to near record levels against other currencies, and Europe continuing to struggle, these trends were a headwind for internationally diversified investors such as ourselves. Of course, the corollary is that U.S. assets have become increasingly expensive compared to the rest of the world, which suggests that, going forward, there will be ample opportunities for globally oriented investors.

In our core strategy, Global Growth, results for the year were in the 5%-7% range, comfortably outstripping the return of our benchmark (70% global Stocks 30% U.S. bonds), though we lagged the U.S. equity market. As noted above, this was primarily due to our global diversification, which itself is risk averse, but also partly due to our conservatism across asset classes. While I make no apologies for the latter, with hindsight we could perhaps have been more U.S.-centric as regards the former.

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