December Market Note


Deja Vu
It’s like deja-vu, all over again.
-Yogi Berra

For the second time this year, the pollsters got it wrong. As it turns out, global investors were caught off guard by the models the media and pundits used to predict the election outcome. The polling companies were also woefully wrong in their prediction of Brexit. We have long been a detractor of pundits and the clairvoyant. These last six months have been a great case study regarding our view that the investments we make for you are disciplined and long term. While it is fine for you to experience emotions, it is very important that we separate these emotions from our political, economic and investment decisions. As with Brexit, the implications of this election will only become known over the next couple of years.


Economic Reports

Consumer spending is off to a nice start in the fourth quarter with retail sales rising a solid 0.8% in October. Ned Davis Research (NDR) reported that Weekly Retail Chain Store Sales Index rose 0.5% last week, and was up 1.5% from a year ago. NDR further noted that shoppers spent an average of $373 on Thanksgiving and Black Friday. USA Today and Adobe Digital Insights reported that Cyber Monday yielded $3.45 billion in sales, a new online record. That number was 12.1% higher than Cyber Monday 2015. These figures are a good sign for overall spending for the holiday season. Initial claims for unemployment insurance fell to the lowest level on record, suggesting continued strength in the job market. Inflation has held around 2%, but with the increase in the barrel of oil we see the “all items” getting closer to the “core.”

According the Ned Davis Research Crowd Sentiment Poll, investor sentiment remains neutral while the latest data from the Investment Company Institute on mutual fund flows shows the largest outflow from U.S. equity funds since the rocky August 2011 period. Investor skepticism is a traditional contrarian indicator leading us to believe the extra cash on the sidelines could find its way back into equity markets.

Interest Rates

Interest rates have made quite a move from the summer of this year but as the chart shows they are still off of the rates we saw in 2015 and 2014.

Source: Ned Davis Research

Year-End planning

As the end of the year approaches, it is always a good time to make moves that could potentially reduce your tax bill.

Tax moves for individuals

  • If you have gains for the year, it is a good time to look for losses that could offset those gains. Gains can be found beyond your investment portfolio (ie: real estate or other partnerships).
  • Postpone bonus until 2017, pre-pay property taxes, or other state/local taxes.
  • Make sure you have taken your required distributions from your IRA (if over 70) and your inherited IRA (any age).
  • Maximize your health savings plans.
  • Install energy saving improvements to your home, such as certain high-efficiency insulation.

For business owners

  • Look at options to maximize your retirement contributions and profit sharing. We can help you design a plan that can maximize the benefits to you while providing a nice deduction.
  • Consider expenditures that qualify for the business property expensing options.


New Team Member

Spinnaker is proud to announce that Anthony Puma has joined our team. Anthony has been an advisor for 8 years and worked with us at our prior firm. When not meeting with his clients Anthony is an artist who recently had his art shown at the Wyland Gallery in Laguna Beach. Anthony is a native of Laguna Beach and currently resides in the Bay Area.

Villa of Lago D’Como by Anthony Puma

Bottom line

There could be continued volatility in the markets as all of the cabinet choices and policies changes are digested. 2016 will go down as a fickle year, as you may recall, the markets were off over 10% in January. We continue to view our relationship with you as a partnership. With this partnership we believe we owe you the Spinnaker Level of Care. Portfolio building is just a part of the planning we do for you. We want to make sure that you adhere to the financial plan that was designed for you. We will be there for the events and transitions that happen in your life, and also be there as a coach to give you insights when you have questions or concerns. Our partnership with you will keep you focused on making rational financial decisions based on factors we can control such as how much money to spend or save, keeping your costs and taxes low and rebalancing your portfolio when it becomes necessary.

Thank you for continuing to be our partner. If we do not speak with you before the end of the year, have a wonderful holiday and we look forward to a great New Year.



Morgan Christen, CFA, CFP, MBA
Chief Executive Officer


* Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results, and there is always the risk that an investor may lose money. Diversification neither assures a profit nor guarantees against loss in a declining market. The information contained herein is based on internal research derived from various sources and does not purport to be statements of all material facts relating to the securities mentioned. The information contained herein, while not guaranteed as to the accuracy or completeness, has been obtained from sources we believe to be reliable. Opinions expressed herein are subject to change without notice. Ned Davis Research is an independent firm. Yogi Berra Quote Cyber Monday source 10 year constant Maturity chart: Ned Davis Research. Tax information is from general sources not a recommendation of tax planning.

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