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Index Month / Year to Date

Dow Jones +3.83%/+22.82%
S&P 500 +2.81%/+18.26%
NASDAQ +2.17%/+27.69%
10-yr Treasury was 2.38% at the end of October and 2.42% at the end of November
Source: Finance.yahoo.com

Markets:

The Trump “Bump” reached a new apex on the final day of November when the Dow Jones Industrial Average spiked 1.6 percent and surpassed the 24,000 mark for the first time. The S&P 500 also rose 1 percent and the Nasdaq a little less than 1 percent.1 The spike was further evidence of the rally that’s been underway since Trump’s election. The rally is based mostly on hope and optimism around the GOP tax bill, whose approval looked more likely on November 30 after Senator John McCain pledged his support.

As the promise of slashed corporate taxes continued to fan the flames of irrational exuberance on Wall Street, critics continued to argue that the Republican tax plan, overall, was more likely to increase the federal deficit and hurt the middle class than it was to promptly align corporate growth with overinflated stock prices.2 Either way, with the markets still hovering at all-time highs, right now remains an ideal time for anyone looking to reduce their market risk to do so cost-effectively—i.e. by “selling high.”

With January 1 fast approaching, reassessing the level of risk in your portfolio might make for a smart New Year’s Resolution. It’s important to remember that strategies aimed at increasing retirement income (such as those we specialize in at SIS) actually call for reducing your financial risk, not increasing it, as some people believe.

Another good resolution might be to make a point of helping educate friends or family members over age 50 about the importance of adopting what I believe is the right mindset for today’s economic environment—a mindset in which asset protection and retirement income are their top priorities. That effort could mean inviting someone to an educational workshop or simply striking up a conversation about income-based investing with one person each month. Or, you could simply recommend a book or TV show geared toward educating investors near retirement about investing for income: a book such as Return on Principle: 7 Core Values to Help Protect Your Money in Good Times and Bad or a show such as The Income Generation, which airs weekly on NewsmaxTV.

1. Joe Ciolli, “The stock market just surged past a record milestone thanks to the GOP tax bill,” Business Insider, last modified on November 30, 2017
2. Noah Friedman, Lauren Lyons Cole, and Lamar Salter, “Here’s what the Senate Republicans’ tax plan means if your making $25,000, $75,000 or $175,000 a year,” Business Insider, last modified November 30, 2017