2015 ended on a down note with equities receding a little ìless than 1% on average. For the year, the Dow Industrials ended with a loss of 2.2% and the S&P 500 negative by 0.7%, excluding dividends. The tech-heavy NASDAQ managed a gain of 5.7%. Other key numbers for the year included a 30.5% drop in crude oil prices; a 9.3% gain for the dollar over most currencies; and the yield on the 10-year Treasury note little changed. For the week, you couldn’t find a sector making any headway with energy taking another loss of 2.34%%, followed by basic materials ending down by 1.8%. Investors are glad to close the books on 2015, but I believe it will be difficult for the year ahead to see a significant rebound. Markets may continue to struggle as the Federal Reserve moves forward to raise short-term interest rates and the global economy is not expected to reverse course anytime soon. Oil prices, with high inventories, tepid demand and no lack of production, should also be a drag on equity markets.
During the past year, the progress for the three buttonwoodproject portfolios was nothing to write home about. In the conservative list, Danaher moved up 8.4% percent, but was dragged down by virtually all the other candidates, not including dividends. In the income account, Dow Chemical managed a 13% advance plus a 3.2% dividend. Kimberly-Clark added over 10% along with a 3% yield for a 13.2% total return. The portfolio, however was negatively impacted by energy related choices: ETRACS Alerian MLP and Total, SA. For those investors focused on the aggressive list, Foot Locker added 16% for the year. JPMorgan Chase provided for a total return of about 8% and Gilead Sciences added a meager 2% since joining the list in January. Again, energy and basic material stocks did the group no favors, thanks to Hess Corp., Newmont Mining and coal-dependent CSX Corp. Chemical giant, LyondellBasell, which was added in September, garnered a 4.5% move to the upside since that time. The biggest gainer was Harris Corp. with a 21% advance along with an additional 2.3% dividend. For the week ahead, the Federal Reserve’s FOMC minutes on Wednesday could give clues about future monetary policy and provide more insight into the decision last month to increase short-term rates. Let’s take a positive view in the year ahead, as some of the depressed prices for good-quality stocks making the blog portfolios may trend higher and the dividends appear safe for the most part. But the days of 10% annual gains may be over for a while.
Here is the answer to last week’s trivia question: Which of the following is the most valuable sports-related brand? ESPN, Under Armor, Callaway Golf or Nike? Answer: Nike with a brand value worth an estimated $26 billion.
Today’s Trivia Question: Which state, according to Forbes, ranks highest for being the best for business? Texas, Utah, North Carolina or California.