January 3, 2017 Happy New Year from the entire GPS Team!The MarketsWhat a difference an election makes… At the start of 2016, investors were rather pessimistic and risk averse, preferring bonds to stocks. By the end of the year, they were quite optimistic and preferred stocks to bonds. In between, markets traveled a bumpy road.During January of last year, few investors imagined we would be where we are today. Markets started 2016 in a tailspin with investors worried about slower growth in China, U.S. economic strength, oil price declines, and the possibility of a global recession.During the first 10 trading days of 2016, U.S. stock markets got off to their worst start for any year on record, reported Financial Times. The Standard & Poor’s 500 (S&P 500) Index lost about $1.4 trillion in value and every major sector in the index was in the red, except for utilities.The sharp drop stunned investors, and many shifted assets from global stocks into bonds. In lateJanuary 2016, CNN Money reported:“Investors yanked $2.9 billion from U.S. stocks last week, marking the seventh week of outflows out of the past eight, according to Bank of America Merrill Lynch. Emerging markets, which have been in turmoil for months, experienced a 13th straight week of outflows of $1.2 billion. Money is fleeing to safe haven government bonds.”Investor sentiment was near its all-time low. On January 14, 2016, just 17.9 percent of participants in the American Association of Individual Investors (AAII) Investor Sentiment Survey said they were bullish. The all-time low is 12 percent and the long-term average for bullishness is 38.39 percent. Clearly, investors were not feeling optimistic about stock markets.A specialist cited by Time.com discussed market performance and investor sentiment in the context of the AAII Survey“Historically…the S&P 500 has advanced 7.7 percent in the six months after reaching this level of bearishness. By contrast, stocks have historically gained only 2.7 percent in the six months following the most bullish readings among individual investors.”As it turned out, the S&P 500 Index may have pushed the historic average higher during 2016. Barron’s reported the Index finished the year up 9.5 percent and returned 12 percent when dividends were included.Investors didn’t enjoy a smooth ride last year, though. Late in June, the United Kingdom shocked the world when it voted to leave the European Union. Financial Times reported global markets lost $3 trillion during two days of brutal trading, including “…a nearly $1tn loss for the S&P 500, or the third worst two-day drop ever in value terms.”Markets recovered relatively quickly after the Brexit drop. However, it looked like another rout was in the works in November as the U.S. presidential election votes rolled in. The initial reaction of global markets to Donald Trump’s election was panic; however, optimism soon prevailed and U.S. markets rallied on hopes the President-elect’s yet to-be defined policies would bolster growth and positively affect the global economy.The expectation of stronger growth, along with an anticipated December rate hike by the Federal Reserve, pushed bond yields higher and investors moved assets out of bonds and into stocks. Barron’s reported:“The 30-year bond climbed 0.3 percentage point to 2.94 percent, resulting in a 6.3 percent decline in price. (Bond prices move inversely to yields.)…It wasn’t just Treasuries. Municipal bonds, corporate bonds, and preferred securities all fell. Bloomberg estimates $1 trillion in the value of bonds evaporated last week after theelection.”At the end of 2016, investor sentiment had risen well above the long-term average. More than 45.5 percent of participants in the AAII Investor Sentiment Survey were feeling bullish. Investors weren’t the only ones feeling optimistic. The Investors Intelligence survey of investment advisors found the bulls (59.8) outnumbered the bears (19.6) quite significantly in late December. The Bull/Bear Ratio was at 3.05, according to Yardeni Research.The ratio is considered by many to be a contrarian indicator. When the Bull/Bear Ratio is at 1.0 or lower, and when it is at 3.0 or higher, we may be near a turning point for stock markets, according to Investing Answers and The New York Times. Morningstar’s ratio is also high indicating a potential overvalued market.GPS THOUGHTS: 2016 was challenging for diversified investors. While US stocks saw a nice rise after the Trump election, bonds saw a significant drawdown due to rising interest rates. Emerging markets and international stocks were hit. Gold plummeted as well. As we have mentioned in previous commentary’s, after the election we did rebalance many portfolios and added infrastructure stocks, financial stocks, small cap stocks and repositioned the bond holdings to include more rising rate friendly holdings. This has worked nicely for our portfolios as has the investments that we added in January and February when the market was selling off. What didn’t work as well as would have liked was the protection measures we took in January and February as the sell-off was steep and swift and each portfolio has an “alert” set-up to prevent more significant losses in a downturn. When the market rebounded quickly some of the positions we sold as a protective measure didn’t get reinvested “at the bottom” and were eventually reinvested as the market calmed and spiked up.Looking forward to 2017: Below is a list of GPS goals for 2017:1. Enhanced portfolio management capabilities. Through our partners we have access to dozens of professional asset allocation teams and firms and will be utilizing their capabilities in the future. It will be a clear goal of ours to meet with each client to discuss these programs and how they can enhance portfolios. Downside protection for our preretirees and retired clients will still be a goal as will income production for our retired clients mixed in with growth strategies for all ages and risk brackets.2. Achieving client goals has always been number one for us so each client will be getting a “financial plan” which will come from our robust financial planning software programs. Each area of need will be included: investments, cash-flow, taxes, estate needs, insurance reviews and retirement income goals/projections. Our clients can plan on more in-depth reviews3. With the tax law and estate planning changes we will be meeting with our client’s to do a “beneficiary and estate document” review4. We want to make sure all clients know that GPS Wealth Management works as a team with all of the professionals in our building. We offer wealth management (Jim Goodland Team, tax-planning and preparation (Jim Goodland Team working with the Caylor LTD Team), estate planning (2 attorneys), business legal planning from our in-house business attorney, bookkeeping, insurance review/planning (life, health and disability). Our upgraded planning processes will ensure if our clients need any of these extra services we can provide them.HOW IMPORTANT IS A COLLEGE DEGREE? At the University of Baltimore 2016 Midyear Commencement, Federal Reserve Chair Janet Yellen shared her thoughts about the importance of college:“Economists are not certain about many things. But we are quite certain that a college diploma or an advanced degree is a key to economic success. Those with a college degree are more likely to find a job, keep a job, have higher job satisfaction, and earn a higher salary. The advantage in earnings is large. College grads' annual earnings last year were, on average, 70 percent higher than those with only a high school diploma. Back in 1980, the difference was only 20 percent. The gap in earnings is significant only a few years after graduation – almost $18,000 a year, according to some recent data. Beyond these advantages, research also shows that a college or graduate degree typically leads to a happier, healthier, and longer life.”There appears to be significant benefits to attending college. However, Aon Hewitt recently suggested there also may be some drawbacks, especially for students who borrow to pay for their degrees. Aon’s survey of 2,000 U.S. workers found 44 percent of Millennials, 26 percent of Gen X, and 13 percent of Baby Boomers are repaying student loans which, “…can have a long-term impact on workers' financial future.”The survey found just 71 percent of workers with student loans were participating in employerprovided retirement plans as compared to 77 percent of workers without student loans.Weekly Focus – Think About It“In other words, I claim, if we really want to improve our judgment as individuals and as societies, what we need most is not more instruction in logic or rhetoric or probability or economics, even though those things are quite valuable…We need to learn how to feel intrigued instead of defensive when we encounter some information that contradicts our beliefs.”- Julia Galef, Co-founder of the Center for Applied RationalityBest regards,The Jim Goodland Team at GPS Wealth Management, LLCP.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate. * Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market ingeneral. You cannot invest directly in this index.* All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Indexperformance is not indicative of the performance of any investment.* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emergingcountries included in the Index.* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.* Past performance does not guarantee future results. Investing involves risk, including loss of principal.* You cannot invest directly in an index.* Consult your financial professional before making any investment decision.* Stock investing involves risk including loss of principal.Sources:http://money.cnn.com/2016/02/01/investing/stocks-markets-january-93-percent-lost/http://time.com/money/4182371/stock-market-dow-crash-reasons/https://www.ft.com/content/9e642f0a-bdc4-11e5-9fdb-87b8d15baec2 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/01-03-17_FinancialTimes-Wall_Street_Makes_Worst_Ever_Start_to_a_YearFootnote_3.pdf)http://www.aaii.com/sentimentsurvey/sent_results (Download historical data) (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/01-03-17_AAII_Sentiment_Survey-Footnote_4.pdf)http://www.barrons.com/articles/stocks-off-1-for-week-up-10-for-2016-1483167529?mod=BOL_hp_we_columns (or go to6. https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/01-03-17_Barrons-Stocks_Off_1_Percent_for_WeekUp_10_Percent_for_2016-Footnote_5.pdf)https://www.ft.com/content/91dd01b6-3caf-11e6-8716-a4a71e8140b0 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/01-03-17_FinancialTimesGlobal_Markets_Lose_Record_3_Trillion_Dollars_Since_Brexit_Vote-Footnote_6.pdf)https://www.ft.com/content/a606181e-a7fb-11e6-8b69-02899e8bd9d1 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/01-03-17_FinancialTimes-Markets_Indulge_in_MakeBelieve_Over_a_Trump_Presidency-Footnote_7.pdf)http://www.barrons.com/articles/moves-to-make-as-the-bond-market-sinks-1478931249 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/01-03-17_Barrons-Moves_to_Make_as_the_Bond_Market_SinksFootnote_8.pdf)https://www.yardeni.com/pub/peacockbullbear.pdf (Page 5 of report) (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/01-03-17_YardeniResearch-Stock_Market_Indicators-Footnote_9.pdf)http://www.investinganswers.com/financial-dictionary/stock-market/bullbear-ratio-1775http://www.nytimes.com/2013/11/03/your-money/the-dangers-of-a-stock-market-melt-up.html?_r=0https://www.federalreserve.gov/newsevents/speech/yellen20161219a.htmhttp://ir.aon.com/about-aon/investor-relations/investor-news/news-release-details/2016/Student-Loans-Hurting-Workers-Ability-toSave-for-Retirement/default.aspxhttps://www.ted.com/talks/julia_galef_why_you_think_you_re_right_even_if_you_re_wrong/transcript?language=enhttp://www.morningstar.com/market-valuation/market-fair-value-graph.aspxPlease remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Spire Wealth Management, LLC), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from Spire Wealth Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Spire Wealth Management, LLC is neither a law firm nor a certified public accounting firm and no portion of the website content should be construed as legal or accounting advice. A copy of the Spire Wealth Management, LLC’s current written disclosure statement discussing our advisory services and fees is available upon request.