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Download January 5, 2016 Dear Friends, The Lerner Group believes that 2016
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January 5, 2016 Dear Friends, The Lerner Group believes that 2016 should be a great year because many new and attractive investment opportunities are likely to arise. The stock market today is at a relatively low level. The S&P Index ended 2015 in the red. As the economy continues to recover, both the profits and stock prices have the potential to trend upwards. Last year the prices of specific commodities such as oil, gas, copper, and steel fell sharply and the Alerian Master Limited Partnership Index fell by over 35 percent. These drops impacted many stock and bond prices negatively. Looking forward, these declines have a positive effect on the economy. The price of gasoline in Chicago, for example, fell from approximately $4.00 a gallon at the beginning of last year to its current price of about $2.25 a gallon. Motorists, in effect, received a tax free increase in their income equal to their gasoline price savings. News reports tell us that department store holiday sales rose in 2015 over 8 percent from the comparable period a year earlier. Your personal experiences let you know that restaurant spending is now higher. On December 31 The Wall Street Journal reported about some positive developments for the economy that could arise in the near future: ”As the oil glut has sent prices to decade lows, plummeting investment by oil producing countries such as Venezuela and Russia and oil drillers such as Exxon and Royal Dutch means fewer barrels will be produced. That could leave the world in exactly the opposite situation as it is now: short of oil and willing to pay more to get it. This may herald the beginning of a cycle that other commodities from gold to copper find more familiar— a cycle in which a glut leads to investment cuts which chokes supply and prompts the price gains that lead to renew expansion and future gluts.” There are other bright sides to lower commodity prices. The United States economy fared much better during the recent period of uncertainty than many other countries. In an effort to protect the value of their liquid assets, investors in China, Russia, Europe, and South America started to sell their local currencies and buy US dollars. As the US dollar increased in strength, foreign nationals began to increase their investments in real estate as well as in stocks and bonds. In addition, foreign businesses increased their exports to us thereby reducing the risk that we will suffer from inflation in the near future. In summary, the slowdown last year contributed to making the dollar the world’s most valuable currency. The price of foreign goods, expressed in dollars declined and the threat of inflation has been reduced. The Federal Reserve is now in a position where it can consider continuing raising interest rates. If they are successful, and rates start to increase, banks should begin to be willing to make more loans. Confident that they will be able to borrow money from banks if they need it, both business and consumers alike should start to spend down some of their large cash balances thereby stimulating the economy even more. As new investment opportunities arise we plan on continuing to meet your goals of preserving and enhancing your wealth and your income. The Lerner Group wishes everyone a healthy, happy and prosperous New Year. We thank you for your past trust and confidence and look forward to working with you in the future. Sincerely, Eugene Lerner Managing Director, Partner The Lerner Group is a group of investment professionals registered with HighTower Securities, LLC, member FINRA, MSRB and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC. This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors. All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The Lerner Group and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice. This document was created for informational purposes only; the opinions expressed are solely those of The Lerner Group and do not represent those of HighTower Advisors, LLC, or any of its affiliates.