Warm winter greetings from all of us at Bath Savings Trust Company! 2016 was a fascinating year in the financial markets. After a long and arduous campaign, stocks took off after the election to reach new all-time highs, while interest rates have been climbing from historic lows. Investors have taken an optimistic stance on the new administration believing that more business friendly policies will be coming in the form of infrastructure spending, tax reform, and less government regulation. More cyclical areas of the market have benefited the most from these anticipated changes in policy, such as financial and industrial companies. Also, energy and other commodity related stocks rebounded sharply last year after an abysmal 2015.
We too share some of these optimistic viewpoints, but we are careful not to jump on any short-term trends when little is known as to the size, scope, and timing of these initiatives. We are steadfast in our approach to find high quality companies with superior management teams leading them. These companies are dominant players in their respective industries and they have shown an ability to consistently grow earnings and dividends at an above-average rate over time. They will surely adapt to any changes that impact their operating environment and incorporate them into their future business planning.
Looking ahead, we start the year with an economy growing nicely. The labor market has stayed firm and wages are rising. Any help from Washington and movement on fiscal policy is most welcomed and has the potential to spur the economy even more. In response to stronger data, the Federal Reserve raised short-term rates another quarter point in December with additional moves likely taking place this year. Lastly, with equity markets reaching new highs corporate earnings are expected to increase, providing support to stock valuations. All in all, we’re off to a good start in 2017.
Many of you enjoyed calling and talking to our receptionist, Martha Wright. Martha left us in August to pursue a career in health and wellness. We miss her but remain in touch and she is doing great! Taking over on our phones, and assisting Sean, is Cathy Irish. Cathy joins us from Bath Savings where she has served in several key roles and has been with the organization for over 20 years. Also joining our team from the bank is Jenn Reed and Danica Glidden. Jenn and Danica have filled two important positions in our operations area ensuring the accurate processing of client information every day. BSTC is growing and we have a great group in place ready to serve our clients.
As you are gathering your tax information for 2016, you can expect to get your tax letters from BSTC in February. In an effort to improve the look and quality of the material you receive, we have moved our relationship to a new company to help us compile your tax records. You will notice a new look and presentation to your tax material and we hope you agree that it is an improvement over what you had received in the past.
You can be confident that we will be following the developments both domestically and internationally closely and assessing how they will impact the high quality portfolios that we manage. It is during times of change like these that the hallmarks of a well-structured portfolio become more important. Please know that as we head into 2017, we renew our commitment to our clients to work diligently to ensure our accounts are well positioned. Together, we will achieve the results that set us apart.