ILMA Compoundings May 2017 - 37

Encouragingly, the recent acceleration
in economic activity is confirmed by
global coincident and leading indicators,
including business and consumer
confidence surveys, which leads us to
believe it is sustainable.
In the U.S., the election of Donald
Trump as president and a single-party
majority in Congress appears to be
stirring dormant animal spirits in the
business community. Regional surveys
taken by Federal Reserve banks indicate a surge in investment intentions.
This follows a long period of decelerating capital spending and outright
contraction in spending in the last

two years. On the consumer score,
tailwinds have aligned for household
spending. Credit scores have repaired,
job creation is persistent and wage
gains are on an upward path. Importantly, various surveys highlight the
improvements in consumer confidence and job prospects, encouraging
the propensity to spend. In all, we
expect domestic economic growth to
move toward a higher plane this year
(as long as a trade war doesn't erupt
and undermine confidence).
Good news on the economic front
spills over to corporate earnings. The
five-quarter-long profit recession ended

NUMBER OF WINNING YEARS, 1987-2016
Cash
3
Bonds

Stocks

Foreign stocks

Performance is from Dec. 31, 1986, to Dec. 31, 2016. Cash
is represented by the Citigroup three-month Treasury Bill
Index. Bonds are represented by the Citigroup Corporate Bond
Index, an unmanaged index. Stocks are represented by the S&P
500 Composite Price Index, an unmanaged index. Foreign
stocks are represented by the MSCI EAFE Price Index, an
unmanaged index. Investors cannot invest directly in any index.
However, these indexes are accurate reflections of the performance of the individual asset classes shown. Returns reflect past
performance and should not be considered indicative of future
results. The returns do not reflect taxes, fees, brokerage commissions or other expenses typically associated with investing.
The principal value of cash alternatives may fluctuate with
market conditions. Cash alternatives are subject to liquidity
and credit risks. It is possible to lose money with this type of
investment.
The return and principal value of stocks may fluctuate
with market conditions. Shares, when sold, might be worth
more or less than their original cost.

U.S. Treasury securities are guaranteed by the federal
government as to the timely payment of principal and
interest, whereas corporate bonds are not. The principal
value of bonds may fluctuate with market conditions. Bonds
are subject to inflation, interest rate and credit risks. Bonds
redeemed prior to maturity might be worth more or less
than their original cost.
The risks associated with investing on a worldwide basis include differences in financial reporting, currency exchange risk,
and economic and political risk unique to the specific country.
Investments offering the potential for higher rates of
return also involve higher risk.
Mutual funds and exchange traded funds (ETFs) are sold by
prospectus. Please consider the investment objectives, risks,
charges and expenses carefully before investing. The prospectus,
which contains this and other information about the investment
company, can be obtained from your financial professional. Be
sure to read the prospectus carefully before deciding whether
to invest. Prepared by Broadridge Investor Communication
Solutions Inc. Copyright 2017.
Portions of this article were prepared by Broadridge Investor
Communication Solutions Inc. and Mark Luschini, chief
investment strategist, Janney Montgomery Scott LLC. Member:
FINRA, NYSE, SIPC.

ILMA Compoundings May 2017

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