2016 was an exciting year for us!
The most important accomplishment that we made was establishing this website, bringing the knowledge gained through our trials and tribulations to light. We’ve had some success with several of our investments, and look forward to continued achievements in 2017.
I’m pretty sure we all know New Year’s Resolutions come and go (sometimes within hours!), so instead we’ve set some professional and personal goals for 2017 that will keep us motivated throughout the year.
I encourage you to think about what you hope to achieve in 2017 — keep it to one or two things so you can stay focused. Before we start into 2017, let’s take a brief look at what we’ve accomplished and learned in 2016.
2016 Portfolio Performance
Overall, we made five purchases and one sale this year, capitalizing on a downturn in the market in the first quarter and a substantial rally in the second half of the year.
Oil and natural gas production, through the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), did incredibly well. We were very fortunate to properly read the signs of a sector bottom in February, and even more fortunate that politics supported the industry.
The actions of the Organization of Petroleum Exporting Countries (OPEC), the US, and other major oil producing nations in the coming months to stem the excessive oil supply will be critical in determining future price movements of this ETF. Additionally, we’ll be watching China’s economy since it seems to weigh heavily on the sentiments of oil production investors.
The SPDR S&P Oil & Gas Equipment & Services ETF (XES) did reasonably well.
In the first half of the year, these companies made modest to no gains as they had to cut spending to mitigate the effects of a worldwide production glut. They bounced back somewhat in the second half of the year, and we’re expecting further gains should OPEC stick to its agreement to cut production.
This production cut, coupled with a Trump administration that plans to focus on US company and infrastructure development, bodes well for XES.
We were also able to take advantage of a downturn in the steel industry.
This downturn significantly affected the S&P SPDR Metals & Mining ETF (XME), and we purchased the ETF as it was recovering after a substantial drop in price. The ETF rallied for most of the year, increasing up through both our Sell Threshold and Absolute Sell Threshold, upon which we sold the ETF for a profit.
Unfortunately, emerging markets did not yet recover quite as well as we had expected.
After a mid-year increase in share price, the SPDR S&P Emerging Markets Dividend ETF (EDIV) dropped back down below our purchase price.
Analysts’ views on the future of emerging markets are mixed — some are encouraged by momentum in the Chinese economy and interest rate cuts in Brazil, India, Russia, and Indonesia, while others are concerned that a strengthening US economy will make it more difficult for emerging markets to compete with a stronger dollar.
Biotechnology was somewhat erratic, with the industry trying to recover after bad press.
In September and November, the SPDR S&P Biotechnology ETF (XBI) briefly crossed our Sell Threshold, but the industry continued to show signs of strength with a surge in merger/acquisition deals and a new muscular dystrophy drug. As a result, we continued to hold XBI.
Lately, President-elect Trump has repeatedly attacked the biotech and pharmaceutical sectors. We’ll have to keep a close eye future political effects on the sector, especially if the administration’s verbal attacks turn into policy and/or law.
Finally, pharmaceuticals did not do well at all. After briefly straying from our strategy, purchasing shares above the Buy Threshold, the SPDR S&P Pharmaceuticals ETF (XPH) dropped back below the Buy Threshold and more or less held constant.
As noted above, the pharmaceutical sector is squarely in President-elect Trump’s cross-hairs, and it’s entirely possible that the fund has not yet hit bottom. But that’s OK — we’ll continue to watch the sector and capitalize on any future buying opportunities.
2017 Goals and Priorities
We are quite optimistic about what 2017 has in store! After a banner year investment-wise in 2016, we’re looking to take Compose Your Investments to the next level.
These days, the word “goal” tends to carry a lot of baggage, with several different theories as to how to develop and achieve goals. I tend to keep things simple, so the guidelines I use for goal-setting are to develop specific, measurable (so you know when you’ve achieved them) goals that challenge me to get out of my “comfort zone.”
Using these guidelines, here are our two professional goals for 2017:
Our primary goal is to increase our subscribers from just a handful in January to 1,000 subscribers by year’s end.
I realize that this is an aggressive goal, but it’s by no means impossible! A wise man once recommended setting the bar high, because you will only jump high enough to clear it.
We’ll be reaching out to friends and relatives to help spread the word, and getting our website known throughout the financial blog community to achieve this goal.
Our secondary goal is to develop and publish our first instructional course.
This is a “teaching website” after all, and we hope to provide valuable financial information that can help you achieve your goals in life! This will take a lot of time and dedication to build, but should be achievable by year’s end.
Notice that I didn’t set a dollar value or percentage increase goal for our investments.
While achieving financial security through these investments is still central to our mission, I don’t want our goals to provide incentive to stray from our strategy. Selling to lock in profits early, rather than being patient and letting the ETF continue to grow, would be counterproductive.
From a personal perspective, I’m looking to put my health into better focus.
My personal goal is to clock a mile in under 6 minutes.
It’s time to get this nearly-40 year old body back into better shape!
It’s been a few years since I’ve gotten to this level of running fitness, so it will take some time and effort to get there. The first thing I’m going to do is focus on the easy stuff — food. I’ve already cut out soda from my diet, and am focusing on eating smaller portions to cut down my caloric intake.
Next, I’m going to dust off some old cross-country workouts and start building a distance base, eventually having the endurance to do a 5 mile run once-a-week.
Finally, it will be time to hit the track and get some sprint workouts in to build my speed. After a few months at this, I should be ready to break through the 6-minute-mile barrier.
Overall, I’m very optimistic for the potential value that we can bring to you in 2017, and we plan to deliver!
Now it’s your turn — what do you hope to achieve in 2017? I encourage you to think it through and answer the question in the comments section below. I’m looking forward to reading about your goals and dreams!
Thanks for reading this article, and I hope it helps you formulate a plan for success in 2017.