In our Fall 2016 Investor Letter we discussed how emotions tend to run high around certain periods like the recent U.S. election. We noted in that newsletter that emotional investment decisions can drive investors to reduce their stock market exposure and harm long term returns. Certainly, the equity market performance following the the November election was one that strongly rewarded investors that stuck with their investment discipline.
Our recently published Winter 2016 Investor Letter discusses the broad improvement in confidence that is showing up in a number of economic variables. The improvement in consumer confidence is important as the consumer accounts for nearly 70% of economic activity. Also included in the newsletter is commentary around the rise of the "Populist Movement' from the BREXIT vote in June to the Italian Referendum in December. While we take no stance on the merits of such movements, it is undeniable that recent elections have dramatically altered the state of western politics and the policies that may be pursued will have an impact on ones investment portfolio as we review the year ahead.
For additional insight into our views for the market and economy, see our Investor Letter accessible at the below link.