With apologies to Elton John, the dogs of society will not be howling a sad lament as we say, "Goodbye, 2016"...
On December 31, 2015, I was in Vieques, Puerto Rico. It was a family Christmas trip: my kids, ex-wife, her husband, his son. Weird, I know. But what the heck, family is family, and you only live once.
After a day of snorkeling at La Chiva, I rang in the New Year in Esperanza, drinking rum with a huge crowd of locals and tourists, with makeshift bands and spontaneous parades marching the three-block-long main drag, which is right on the Caribbean.
That was a great start to a typically weird year. Every year has its good moments. My two kids are 16 and 14, and I still get more magical moments with them than I can remember.
Every year has its bad stuff, too. 2016 stands out in that regard: my dad lost his fight with cancer in August, barely five months from being diagnosed...
I know I am lucky that I haven't suffered much loss in my life. I still have my mom and two amazing stepparents. I know some of you reading have suffered more, much more. And I don't know what to say about that, except I'm sorry.
My world changed a lot after my dad died. I changed. I can't put my finger on it, exactly. It's like everything I see is impermanent and fleeting. I feel like I'm a tourist, like I'm just visiting...
The really weird thing is that I'm looking at all the fleeting things in the world a little harder now. Trying to capture the image, the essence, so I don't forget them. It's enlightening in a way, because I'm taking careful notice of how the idiot dog runs in these huge jagged circles when I take her to the park, her hound dog nose in overdrive. Or how fully my son laughs sometimes. And how much I love making him laugh like that.
It's exhausting, too, feeling like you're a layer removed from the world, a step behind. Like I'm moving slower, but everything else is moving faster all around me. I'd like to jump back in with both feet and stop being so damn deliberate and careful. I think that's starting to happen as I come to grips with the reality that people I love and depend on actually can die...
These last few months have been really tough at work. I haven't been able to focus or get enthused about much. But that fog seems to be lifting a little. I can feel some fire coming back. I sure hope so — there's a lot I want to do in 2017 and beyond...
Sorry for going off on this tangent. I didn't really have a topic for today's article, which is always a little dangerous, and I sure didn't plan to talk about my mid-life crisis or whatever. I'll move on...
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Investing in 2016
2016 was an amazing year for investors. It seemed like everything you touched turned to gold. In my Wealth Advisory income and dividend newsletter, my assistant Jason Williams and I recommended 13 stocks for the year, and we have some terrific gains. The February recommendation is up 70%, the October recommendation is up 23%, November's is up 7%...
The worst performance we got on our 2016 stocks was a 14% loss. It's true, you can't win them all. But we averaged 7.2% per recommendation that we made in 2016. Overall performance was better because we got some huge gains from portfolio stocks like Boeing, Bank of America, and Alcoa.
In 2017, we will continue with our strategy of buying the best U.S. dividend stocks. For the most part, I've been avoiding foreign and emerging markets since the financial crisis. I just don't see enough growth in the world to take on the risk of emerging markets. And I don't think that changes in 2017. If anything, emerging markets might get worse.
The powerful rally we've seen for the U.S. dollar is going to hurt foreign economies as their currencies fall against the dollar. The longer the dollar stays strong, the worse it will be. Foreign companies have a lot of dollar-denominated debt — over $3 trillion. That gets harder to pay when the dollar is strong.
The Fed is likely to hike at least a couple times in 2017. That will support the dollar for sure.
Add in the potential for Trump to renegotiate trade deals, and you have to be concerned.
I also think the strong dollar is going to weigh on gold prices in 2017. It's hard to be bullish on gold when the dollar is strong. The Fed is tightening, and the economy may have some growth.
Over the last 18 months or so, I've added several tech stocks to the Wealth Advisory portfolio. I love the fact that so many tech stocks now pay dividends. You get excellent growth, and you can get the benefit of compounding if you reinvest those dividends. Tech stocks will do very well if U.S. GDP growth starts beating expectations.
I also like the potential for U.S. oil stocks in 2017. They've made a nice move since OPEC reeled in production, but there's more to come once these companies start turning a profit again.
So, here's to great 2017! Happy New Year, and I'll talk to you next week.
Until next time,
An 18-year veteran of the newsletter business, Briton Ryle is the editor of The Wealth Advisory income stock newsletter, with a focus on top-quality dividend growth stocks and REITs. Briton also manages the Real Income Trader advisory service, where his readers take regular cash payouts using a low-risk covered call option strategy. He also contributes a weekly column to the Wealth Daily e-letter. To learn more about Briton, click here.