Friday’s Financial Update 3-24-2017

Written By:  Michelle Smalenberger, CFP®

Did this week remind you of political seasons we have experienced over the past several years?  It sure reminds us of times like the initial ACA legislation, Brexit, or more recently the elections.  We have been awaiting results of legislation change with the proposed American Health Care Act and the effect that it may have on the market.  In reality, the results won’t likely sway the market negatively for the long-term, but could provide a continued move forward if it does pass.  Much of the questioning about whether or not the proposed healthcare changes will happen is being asked because many initially thought not passing the bill would cause a referendum or halt to the rest of the reform changes hoped for.

We are hearing much less of the discussion that everything hangs on this passing and a much more certain tone that not passing this legislation will cause more of a “hiccup” in market performance.  There is definitely a desire to move on to other reforms that can make larger differences on growth in the economy like tax reform.  So the insistence on getting healthcare reform this year is not as large of a concern, and seems if it doesn’t pass that Congress will just move on to the next item in the priority list.

Now, we may see a second vote if the first vote does not garner the amount needed.   But aside from this it seems the attitude is move on, we tried.  We also have the potential that the bill gets pulled and doesn’t even get voted on this afternoon.  It is encouraging to note the attitude of working together to try and create something that multiple sides can agree on, rather than just disagreement and no discussion.  Even if the overall markets don’t make large moves there could still be some sectors like healthcare that could see larger swings in the near term as reaction to the outcome.

So if the markets are not dependent on the results of the vote for the long-term, what are they looking at?  As the end of the quarter is approaching we will once again find ourselves in a new earnings season over the next few weeks.  Investors will be looking for continued growth of GDP and further economic improvement.  Continued improvement and strength in employment and earnings is what we will be looking for to prove the strength which we want to invest upon is still intact.

If we do see a hiccup or slight pullback in the market, it may provide an opportunity to buy holdings that have come down in value but we expect to see advance.  As we always suggest, develop a well-diversified portfolio that can provide growth to reach your goals over the long-term.  Remember, that short-term deterrents should be evaluated and analyzed, but quick reactions that can hurt your portfolio should be considered thoughtfully.