2017 year in review

The ball has dropped in Times Square and the turning of the calendar often gives us time to reflect on the last year. Many things have transpired in 2017, good and bad. Seemingly, at any moment you could have tuned into your favorite news channel only to see coverage on North Korea, hurricanes, indictments, tax reform, record setting stock markets, or virtual currencies. Ultimately, 2017 will either be classified as the “birth year of the cryptocurrencies” or the “year of the Trump Tax Reform.”

Let me tell you about one major headline that is not being broadcasted: the failing dollar. Over the holiday, as I stood in front of our fireplace trying to thaw from the cold, my wife briefly told me about an e-mail she had just received. The subject was titled “Urgent Support Needed!” We, as a family, support a missionary who is currently serving in Thailand, and he sent us a message. This missionary and his family have a monthly support budget of $3,000. Due to the depreciation of the dollar, they have seen over a 10% drop in their purchasing power. The urgent need was to fill the $300 monthly void to make ends meet.

Yesterday, I spent some time crunching numbers to determine how the dollar actually did in 2017. Here is a quick rundown: USD started 2017 off at 103 and ended at a lowly 91.75. An actual loss of 10.9%! Then I calculated one more thing, Our S&P 500 performance. The S&P 500 had a return of roughly 18%, which is a fantastic gain for 2017. However, if you factor in a 25% tax on the gains and add in the dollar purchasing power loss, the net gain is roughly 2.5%. I don’t know about you, but that gave me great pause.

What about the yellow metal?  It seemed to be lost and forgotten behind Bitcoin and the record stock market year. However, behind the scenes or right out in the middle for all to see, it didn’t matter – gold and silver had their best year since 2010. Gold and silver boasted 14% growth, which happened during a year the stock markets had repeated record highs. That statistic is a very telling sign for what is to come in the precious metals sector.

Even though we will all be “paying less tax” in 2018, be sure not to forget about real money and wealth insurance. Gold and silver play a role in all environments and can appreciate in times when the stock markets also rise. How much higher can the markets go? Can Bitcoin (which is backed by nothing – just like the dollar) continue to $100,000? Time will tell. Gold and silver have stood the test of time and should be a part of every portfolio.