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4th Quarter 2016 Commentary

The fourth quarter of 2016 began with SignalPoint’s Market Risk Indicator (MRI) just below its median value and in the middle of its neutral range. Concerns relating to the unprecedented political events that led up to the Presidential election left essentially all market indices on the negative side in October. However, following a stunning election
outcome, the markets responded favorably in November and December. The MRI closed the year slightly above its median value but still firmly in its neutral territory. For calendar year 2016 all SignalPoint’s equity and balanced strategies showed solid gains and generally tracked their respective benchmarks. US Domestic strategies outperformed the global and international portfolios where returns were more muted. The energy sector led the way after being the worst performing sector the last two years.

The SignalPoint income strategy returns were representative of their risk profiles with the higher yielding/more aggressive portfolios out-performing more conservative strategies. All SignalPoint income strategies finishing the year with positive returns despite a rising interest rate environment. Although the Federal Reserve increased
rates only once in 2016, the 13 week Treasury yield more than doubled from 0.265% to 0.564% over the year. Other bond yields anticipated higher rates and moved higher while sending prices lower. We believe this trend will continue and our expectations are that there will be several increases over the next year. As one would expect following the market’s performance that reached all-time highs, we begin 2017 with a slightly higher risk profile than the previous year. Our MRI indicates that potential risk and reward are currently balanced. Meanwhile, S&P earnings are projected to rise in 2017, reversing their trend from the prior four quarters. Additionally, the Trump Administration’s policies appear to be more accommodating with an easing of costly business regulations and a lowering of taxes. On the other hand, there is a higher potential for trade wars if some of the new administration’s policies are implemented.

We welcome comments and questions relative to risk assessment and performance.
Please let us know if your financial situation or investment objectives have changed so
we can review your portfolio. Finally, feel free to contact your advisor or me.

Thomas M. Veale
Chief Investment Officer
SignalPoint Asset Management

SignalPoint Asset Management, LLC
Office Hours: 8:00 am—4:30 pm Monday—Friday
1201 E. Walnut Street, Springfield, MO 65802
Phone: 877.769.9980