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Quarterly Review 04-30-2017Submitted by CHARLES CARROLL FINANCIAL PARTNERS on May 9th, 2017
Client Account Reporting Quarter Ending April 30th, 2017 On Wednesday, I boarded a plane in Boston where it was 49 degrees and raining so that I could meet with a client in Hilton Head, S.C. It has been a miserable spring in New England with seemingly endless rain interspersed with a few glimpses of sunshine. Once the plane landed in Savannah, Georgia the sunshine appeared and the temperature was an enjoyable 76 degrees. While the only thing that changed, that day was my geographic position, everything seemed decidedly brighter and less burdensome as I drove from Savannah to Hilton Head. Spring in New England is decidedly different than the rest of the country. In fact, some of our New England neighbors call April the “mud month,” as the snow base starts to melt and the ground becomes saturated. In January 2016, the stock market began the year on a decidedly dismal note. In fact, the first few trading days of 2016 experienced a market rout that had never been seen before at the start of a New Year in the history of the stock market. These early results dampened any thoughts of rebounds throughout the spring and into the summer. Despite a very lackluster start to the year for our clients, our equity portfolios did not change. This I am sure caused much angst and heartburn for many of you. By the end of summer 2016, the market was reluctantly moving forward, but the movement from the stocks in our portfolios again lagged the overall market which added to the Prilosec dosage clients had to endure. Our view was that the larger growth stocks were providing significant increases in earnings and cash flow that was not being recognized by investors. Holding these positions, while painful short run, would at some point be rewarded. It was not until the reversal of the stock market futures activity the night of the presidential election that our patience, and client portfolios, began an upward climb. Since that night, equity positions in client accounts have outpaced the overall market and most accounts now have better returns over the past year than many of the indices associated with the overall market. While waiting for a turnaround in the valuation of your accounts in 2016 was much like waiting for Spring in New England. It does seem that some sunshine has appeared making the long wait, I hope, much more tolerable. I want to thank you for having endured the “mud months” of your portfolios through 2016. Boarding the plane back to Boston I knew that while the weather there would not be like it was in Savannah, that spring would come to New England just as it has every year. I still wonder though why all New England hasn’t decided to move south.