December markets gyrated with unusual drops and rebounds. The stock market indicators all closed the month down by nearly 3% and closed the year with losses for large company stocks averaging -1.5%. 2015 stock markets never offered investors great headway and consistently trimmed gains with subsequent losses.
The Federal Reserve began the rise of interest rates in December with the markets cheering their evaluation of the strengthening economy. China remains the major wild card in the mix of situations that may have a negative effect on the rest of the world economies and markets. Meanwhile the VIX, a volatility measure that runs opposite to market returns, has been gradually rising suggesting this may not be a good time to add to stock positions. A year with such volatility often indicates a market in transition. Our portfolios are prepared for this and require no immediate adjustment.
Winter seems to have finally arrived with the opening year. Fresh parsley and thyme are collected from the garden in advance of the first bitter cold of this season. Mike has topped up the bird feeders for the food-is-warmth visitors. This year we have no illusions that the mild December indicates a mild winter. We do still hold out for a timely return of spring.
