It’s the most wonderful time of the year!

I suspect many of you are as tired of hearing that as I am. I love the holiday season, but the endless repetition of carols can get to you after a while. (In my case, I attribute it to high school jobs working in a department store. By the time I left for the day, I wanted to go after Frosty with an icicle.)

Last week’s economic data wasn’t really terrible, but it was disappointing after the surprisingly strong numbers we’ve seen in recent weeks. Both consumer and business showed lower-than-expected gains and largely failed to meet expectations. Although the economy continues to improve and trends remain positive, the stream of positive data took a breather last week.

It was 243 years ago today that a group of Massachusetts Bay colonists threw the Boston Tea Party, protesting a law they did not like by dumping tea from British ships into the harbor. This, of course, led to further British laws and colonial unrest—and eventually to where we sit today, in the United States of America instead of Greater Britain.

The outcome of this week’s Federal Reserve meeting was as everyone had expected: the Fed raised short-term rates by 25 basis points. The surprising part was the more hawkish tone of the surrounding commentary.

Over the past couple of years, I’ve written several posts that explained why U.S. market indices are not the best ways to measure your portfolio. Although it’s natural to look at the Dow, for example, and see how it matches up with your own portfolio, it really isn’t a good comparison.

Just as I do with the economy, I review the market each month for warning signs of trouble in the near future. Although valuations are now high—a noted risk factor in past bear markets—markets can stay expensive (or get much more expensive) for years and years, which doesn’t give us much to go on timing-wise.

Once again, last week’s economic reports were surprisingly strong, with most consumer and business data beating expectations, often significantly.

I remember when the Dow Jones Industrial Average hit 10,000, both going up and going down. It was a lot more fun going up, especially the first time. The index is now approaching double that level—Dow 20,000. If we get there, it should be exciting.

The markets have continued to rally since the election, reaching all-time high after all-time high. Should we be nervous about a short-term pullpack? 

My colleague and friend Peter Essele, portfolio manager here at Commonwealth, has again put together an interesting piece highlighting the gap that often exists between what investors expect and what the market gives them. Although it’s a bit technical, the point is very important given recent moves in interest rates and the ongoing search for yield by many investors.