Following a steep correction over the first six weeks of 2016 (which saw the S&P 500 decline 12% from its recent peak, hitting a fresh 52-week low), equity markets rebounded in late February and March, with domestic market indexes finishing the quarter up nearly from where they had started.
2016 is off to a historically poor start, with the S&P 500 down 9% from its May 21 record of 2130.82 as we write this commentary. Although corrections of 10% are fairly common, below the surface, the picture looks even worse.
Amidst the backdrop of extreme partisanship in this year’s presidential primary–and prevailing negative talking points on the state of the union–Berkshire Hathaway’s 2015 letter to shareholders offered a more optimistic take on America’s future. Berkshire’s 85 year old CEO, Warren Buffett, reflected on the growth in living standards during his lifetime:
“If you don’t know who you are, the stock market is a very expensive place to find out” Adam Smith, Author of “The Money Game”
During the fourth quarter, global equity markets recovered from a sell-off in Q3, though the impact was modest (and from today’s vantage point, short-lived). The S&P 500 index rebounded 7% during Q4, yet barely eked out a positive return for the full year (+1.4% including dividends, the index’s worst performance since 2008).
As the year comes to an end, we wanted to thank you for your trust in our services. We’ve worked with some of you and your families for more than 20 years now, and it is much appreciated.