ILMA Compoundings February 2017 - 33

Much attention has been focused on the political world over the
past few weeks and months, although the financial markets have
had their share of commotion as well. While it is tempting to focus on what will change under a Trump administration, we think
it is more important to focus on the things that haven't changed.
Specifically, the U.S. economy is still growing, and U.S. stocks are
still a great place to be invested.
It is likely that the stock market would have rallied regardless
of who won the White House. The market stalled for weeks as
investors ignored good earnings news; the looming election
made an easy excuse for pessimism. The S&P 500 traded down
nine consecutive days leading
up to the election - the longest such streak in over 30
years, despite the fact that,
thus far, 72 percent of S&P
500 companies have beaten
earnings estimates. In fact,
earnings this quarter thus far
have grown 2.9 percent over
last year; consensus estimates
were for a decline of 0.7 percent. Now that the election

LOSS AVERSION

Research shows that investors tend to
dislike losses much more than they enjoy
gains, so it can actually be painful to deal
with financial losses.2 Consequently, you
might avoid selling an investment that
would realize a loss even though the sale
may be an appropriate course of action.
The intense fear of losing money could
even be paralyzing.
It's important to slow down the process
and try to consider all relevant factors and

overhang is behind us, investors are free to focus on these positive earnings surprises.
While we expect economy-wide growth, we also expect the
financial, energy and health care sectors to benefit disproportionately from a Trump administration. Conversely, bonds could
suffer as investors anticipate higher inflation and the potential
for higher growth. Higher interest rates in the U.S. and a subsequently stronger dollar could harm international investments relative to domestic ones as well. The weight of the evidence leads
us to emphasize U.S. stocks over bonds and international for the
foreseeable future.
Although our views on U.S. stocks are more favorable going
forward, we will not abandon bonds or international stocks. We
still believe that owning a diversified portfolio is important for
managing risk and smoothing out returns over time. It is easy to
view bonds and international markets as an anchor in a portfolio
when U.S. stocks are going up and a diversified portfolio lags an
index like the Dow Jones Industrial Average. However, this is a
trade-off that we accept so that we maintain appropriate downside protection should the rally stall or reverse course.
We'd like to take a moment in reflection and say thank you for
allowing us to help navigate ILMA through the year.

possible outcomes when making financial
decisions. Having a long-term perspective
and sticking with a thoughtfully crafted investing strategy might also help you avoid
expensive, emotion-driven mistakes.
Note: All investments are subject to market fluctuation, risk and loss of principal.
When sold, investments may be worth
more or less than their original cost.
1 The Economist, "What's Wrong with Finance?"
May 1, 2015

2 The Wall Street Journal, "Why an Economist
Plays Powerball," Jan. 12, 2016

Carter is executive vice
president-wealth management
for CSG Capital Partners of
Janney Montgomery Scott LLC
and is investment adviser to ILMA. He may be
reached at 202-955-4307 or mcarter@
janney.com. Janney Montgomery Scott LLC is
ILMA's investment firm.

33

Source: CSG Capital Partners of Janney Montgomery Scott LLC

U.S. Stocks Are Still a Great Investment



ILMA Compoundings February 2017

Table of Contents for the Digital Edition of ILMA Compoundings February 2017

Letter from the CEO
Inside ILMA
What's Coming Up
New Members
Perspective
Industry Rundown
In the Know
International Insight
Market Report
Your New BFF: How Technology Will Boost the Sales and Customer Service Interaction for Your Lubricants Company
The Climate "Accountability" Movement: Why It Matters to the Lubricants Industry
Wind Power Ramps Up Lubricant Demand
Business Hub
Counsel Compound
Washington Landscape
In Network
Portrait
ILMA Compoundings February 2017 - Cover1
ILMA Compoundings February 2017 - Cover2
ILMA Compoundings February 2017 - 1
ILMA Compoundings February 2017 - 2
ILMA Compoundings February 2017 - Letter from the CEO
ILMA Compoundings February 2017 - Inside ILMA
ILMA Compoundings February 2017 - 5
ILMA Compoundings February 2017 - What's Coming Up
ILMA Compoundings February 2017 - New Members
ILMA Compoundings February 2017 - Industry Rundown
ILMA Compoundings February 2017 - 9
ILMA Compoundings February 2017 - 10
ILMA Compoundings February 2017 - In the Know
ILMA Compoundings February 2017 - International Insight
ILMA Compoundings February 2017 - 13
ILMA Compoundings February 2017 - Market Report
ILMA Compoundings February 2017 - 15
ILMA Compoundings February 2017 - Your New BFF: How Technology Will Boost the Sales and Customer Service Interaction for Your Lubricants Company
ILMA Compoundings February 2017 - 17
ILMA Compoundings February 2017 - 18
ILMA Compoundings February 2017 - 19
ILMA Compoundings February 2017 - 20
ILMA Compoundings February 2017 - 21
ILMA Compoundings February 2017 - The Climate "Accountability" Movement: Why It Matters to the Lubricants Industry
ILMA Compoundings February 2017 - 23
ILMA Compoundings February 2017 - 24
ILMA Compoundings February 2017 - 25
ILMA Compoundings February 2017 - Wind Power Ramps Up Lubricant Demand
ILMA Compoundings February 2017 - 27
ILMA Compoundings February 2017 - 28
ILMA Compoundings February 2017 - 29
ILMA Compoundings February 2017 - 30
ILMA Compoundings February 2017 - 31
ILMA Compoundings February 2017 - Business Hub
ILMA Compoundings February 2017 - 33
ILMA Compoundings February 2017 - Counsel Compound
ILMA Compoundings February 2017 - Washington Landscape
ILMA Compoundings February 2017 - 36
ILMA Compoundings February 2017 - 37
ILMA Compoundings February 2017 - In Network
ILMA Compoundings February 2017 - 39
ILMA Compoundings February 2017 - Portrait
ILMA Compoundings February 2017 - Cover3
ILMA Compoundings February 2017 - Cover4
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