The post-election rally carried on through December, benefitting most equities and capping off a strong year. Bonds also benefitted, ending a multi-month slide, despite the Federal Reserve deciding to increase interest rates in December. We thought it would be interesting to share a few facts relating to the S&P 500 Index’s strong performance in ‘16: a) its 12.0% gain was comprised of 9.5% from appreciation and 3.5% from dividends, b) if you exclude the 3 best days of the year then the gain falls to 4.4%, c) if you exclude the 3 worst days of the year then the gain rises to 22.1%, d) the average annual return over the last 50 years is 10.2%, e) annual returns have been positive 13 of last 14 years, including 8 in a row (9 is the record), and 40 of the last 50 years (80%), and f) over the last 50 years, 53% of trading days have been positive and 47% negative (2016 was 52/48).

On December 14, the Federal Open Market Committee (FOMC) voted unanimously to raise the federal funds rate by 0.25% — to a range of 0.50% to 0.75%. This was the second increase since December 2008, when the benchmark rate was lowered to a near-zero level (0% to 0.25%) during the Great Recession.