Fourth Quarter 2017 Commentary The equity markets made an impressive run in 2017, breaking through record levels by year end. For the first time in history, the S&P 500 breached 2,700, the NASDAQ exceeded 7,000, and the DOW pushed past 25,000. Despite all the excitement, some investors were nervous about how far the markets have come and others were left wondering if we’re in for a major market adjustment.Although it’s impossible to time the markets, we do see a positive economic backdrop that can be supportive. Fiscal spending and tax reform should have a positive impact on growth this year. The drop in corporate tax rates alone has improved the earnings outlook and given stock valuations more room to grow. Fiscal stimulus and low unemployment should keep GDP in the 2-3% range over the next few years. With the labor markets at almost full capacity, we should see more pressure on wage growth, which is great for workers.Overall, the global economy is strengthening. In developed markets overseas, the Purchasing Managers Index (PMI) for manufacturing was consistently above 50, which indicates an expansion. Analysts expect this to spill over to emerging market countries, although not as strong in China. While valuations may be elevated here in the U.S. stock markets, momentum in manufacturing along with a weaker dollar can create space to boost international returns. All this makes a good case for another strong year, but we have to remember, markets are still vulnerable. Diversification plays an important role in managing portfolio risks. For our equity portfolios, we see the benefits of having large cap stocks, more growth than value, hedged with international exposure. To compliment the stocks, we prefer corporate bonds for protection against interest rate risk, quality bonds for insurance, and real estate for additional income. Even in this rising interest rate environment, fixed income continues to serve a purpose in our portfolios. Even the best laid out plans need to be monitored. That’s why it’s important to review your risk tolerance and financial objectives periodically. Notify us when there have been changes. We can help you determine if your asset allocation is in line with your current needs. The value of our advisory services is enhanced when we are actively working together to keep your goals and objectives on track.