I normally seek to write my monthly newsletter in a simple, informal way. I don’t believe it’s a good idea to cram it full of financial jargon and technical terms. I know that you, our client, know we have knowledge that goes beyond what we share here each month. I also know that you gave us the job of handling and investing your assets because you didn't particularly care to do it yourself. Because we have the trust of so many, we feel a deep obligation to continually study the markets, the concepts and the research that we believe will rise to the top over time. However, that will put us at odds with the general feeling of the majority of investors occasionally. Now seems to be one of those times. I read a lot of material and watch many financial shows as part of my job. And when the pundits are all talking about the great Trump rally that's happened since the election and the great market that is to come, I wonder if it's my research that's wrong, or if it's the vast number of talking heads that are missing the mark. Most of the market analyst's forecasts are predicting a great year in 2017, partly because of the great changes and the optimism Donald Trump is bringing to the people. But delving a little deeper, I want to consider not just WHAT they're saying, but maybe WHY they're saying it. Could it be that if analysts ever predicted a down market it would cause people NOT to invest? And their jobs are to get investors TO invest? As evidence, from 2000 through 2015, the consensus each and every year has been bullish, holding that the market would rise, on average, about 9.5 percent a year, according to calculations by Bespoke Investment Group. In reality, it averaged only 3.9 percent a year over that period. Since the start of 2000, the Standard & Poor’s 500 stock index has ended in negative territory in five calendar years (2000, 2001, 2002, 2008 and 2015) and has been virtually flat once (in 2011). But bullish predictions encourage investors to pour fresh money into the markets, helping asset management companies to enjoy rising profits. Even if returns don’t match the expectations set by forecasters, memories are short and money is being made. Consider the calamity of 2008. If you had money in stocks that year, you would probably remember. The S&P 500 fell 38.5 percent in the course of those 12 months. It would have been very useful to have received advance warning that stocks were about to plummet, but the Wall Street consensus did not ring out an alarm. On the contrary, the forecast for 2008 was unusually bullish, calling for a rise of 11.1 percent. Wall Street missed the mark by 49 percentage points that year. I study the research we get every day. ProVest pays for it, and it comes in without a political or mercenary agenda. It's pure facts and raw numbers. And much of it is placed in historical context to help it make more sense to Russ and me. We know that in looking at one measure of value, with all other things being equal, the market would need to fall 40% just to get down to an historical fair market value. We see that the S&P 500 index is reported to currently have negative earnings. These are NOT the numbers of a stock market with lots of room to run. But these are part of the fundamentals we look at. Then we take a look back at past market tops and the subsequent market crashes and see signs that are similar to what is happening today. For example, the market usually grows the most during a period where there is a lot of uncertainty and worry about it. Then something happens (like the Trump bump) and a type of stock market euphoria sets in where everyone who was worried about it throws off those fear emotions and their greed emotions set in. They watch as the market just takes off and the worriers finally decide to join them. I believe that's what we're seeing now. And this euphoria is normally the last stage before the crash. I'm telling you this because it becomes so easy to just give in to the herd mentality. We all have recency bias (belief that what has happened recently will continue to happen) and when the market has been advancing like it has since the election we start to subconsciously think that it will continue unabated. Not some, but all of history proves that belief wrong. And that's why we continue to invest your hard won assets the way we do. I’ve made the horrendous mistakes I believe a lot of investors and advisors are making today. While we are invested for the most part, and we are getting a rise in our values, we remain ready to pull the plug when we see a bear market developing. A five percent loss is understandable. A ten percent loss is harder to take but quickly recoverable. Nobody wants to suffer through a fifteen percent loss, but taken by itself, it can be made up. But watching a forty percent loss develop on a portfolio is, I believe, money malpractice. That’s why we have to do everything we can to keep that from happening. And that, my friends, is what we are attempting to do. I apologize for the long piece here. And if you finished it I congratulate you. However, this is the beginning of the year and I want each of you to know where we stand.