This is a very special day.  I’m willing to bet that most Americans do not have a full appreciation for the event that is transpiring today. This is not a political statement. This is a statement about how unusual it is to have one entire administration peacefully hand over the reins to the next administration – as the result of an election process. A bit of historical research tells me that when George Washington stepped down there was great concern in the country regarding how peaceful the changeover would be. We have now had changes of administration almost fifty times – and even during the Civil War and WWI and WWII the change was peaceful.

An interesting case in point: This week a small country in Africa swore in a newly-elected leader, after his successful election by his public. The old administration, however, is not giving up their offices and positions, and the new leader was actually sworn in at offices in a neighboring country.

Just a bit of politics – I personally feel that it’s disrespectful of the members of Congress who chose not to attend today’s inauguration. It shows disrespect for the office of the President, the American election process, and our Country. I note that even the Clinton family is in attendance – dutifully showing respect to the new administration. The boycotters would, in my opinion, better boycott the state of the union address – as that is actually a political event.

So, no matter your party preferences, this is a day to be proud of the American system which has allowed a peaceful exchange of administrations for over 200 years. I am proud to be an American.

The right choice for all Americans today is to wish our new president Godspeed and success in keeping our country safe, free and prosperous.

Market Minute 1/20/2017 – Optimism!

While there was genuine fear in the markets on the eve of the current Presidential election, the fear (as measured by the Vix- the ‘fear index’) had evaporated by the next morning, and optimism appears to be running rampant in the country – by several measures.

The NFIB (National Federation of Independent Business) is considered to be America’s leading small business association. It promotes and protects members who choose to own and operate their own businesses. The association tracks a Small Business Optimism Index – current chart of the Optimism Index is shown here:

The December reading rose to 105.8 from 98.4 in November.  That’s a 7.4 point rise on top of a 3.5 point increase the prior month.  It’s also the highest reading for the index since December of 2004.  A cursory look at the chart shows the extreme optimism shown by small businesses since the recent election. This chart appears to indicate extreme expectations for better economic conditions in the future.

When people are more positive about the economy and the future they tend to invest more dollars in the market, and the added dollars helps promote market gains.  

So that the business side of the equation.  On the personal side, we can make an assessment of the sentiment of the American Consumer by looking at the University of Michigan Consumer Sentiment chart which is shown here:

A quick look reveals that the consumer sentiment is quite high on a relative basis – and is the highest that it has been over the past decade. The consumer indicator shows a general increase in sentiment ever since the lows during the 2008 financial debacle. 

Thus, not only is American business confidence high, but also the American Consumer appears to be quite optimistic about the future of the US economy. We believe the high level of confidence will prove to be a tailwind for American markets, and are also optimistic about future market returns.  

We’ve heard a lot of talk, and are hearing a lot more today. Now it’s time to see whether the new administration can deliver on its election promises. 

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com
2702 N. 3rd St. Ste. 4001
Phoenix, AZ 85004

This weekly article reflects news, commentary, opinions, viewpoints, analyses and other information developed by Denk Strategic Wealth Partners and/or select but unaffiliated third parties. DSWP provides Market Information for illustrative and informational purposes only. If you wish to receive this weekly commentary by email please contact us at 602-252-8700 or by e-mail at info@denkinvest.com.

Ronald Denk is an Advisory Representative offering services through Denk Strategic Wealth Partners, A Registered Investment Advisor. He is also a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation. Information in this commentary is the sole opinion of Denk Strategic Wealth Partners. Past performance is no guarantee of future returns. All market related investments involve various types of risk, which include but are not restricted to, credit risk, interest rate risk, volatility, going concern risk, and market risk.

The Update provides information of a general nature regarding legislative or other developments. None of the information contained herein is intended as legal advice or opinions relative to specific matters, facts, situations or issues. Additional facts, information or future developments may affect the subjects addressed in this document. You should consult with an attorney, accountant or DSWP planner about your particular circumstances before acting on any of this information because it may not be applicable to your situation.

Lincoln Financial Securities and Denk Strategic Wealth Partners and their representatives do not offer tax advice. Please see your tax professional regarding your individual needs.

*The indices are representative of domestic markets and include the average performance of groups of widely held common stocks. Individuals cannot invest directly in any index and unlike investments, indices do not incur management fees, charges, or expenses, therefore specific index returns will be higher. Past performance is not indicative of future results.
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