Stocks closed out one of the least volatile years in the history of both the equity and fixed income markets. Most major indices fell fractionally while the ten-year U.S. Treasury note rallied minimally. As we head into 2018 look for increased volatility, perhaps continued sector rotation (at least initially) as investors were reluctant to sell big winners during Q4 and gradually rising interest rates. That said, we believe the recent passage of tax reform will bump corporate earnings up by as much as 8% during 2018. Also look for companies announcing share buybacks, dividend hikes, increases in wages and capital spending plans as a result of tax reform. As noted last week, we do believe the recent period of severe underperformance by tech is most likely over and with this in mind we continue to favor health care, industrials, the financial services sector as well as select technology companies. Economic fundamentals are strong enough, corporate earnings are sound and interest rates should remain a tailwind (relatively low) – all factors that should provide support for equities at or near these levels. We have noted continually that there remains an upside bias and the downside appears somewhat limited. We see no reason to alter this posture. In addition even if the upward trend that has been in place since the election is broken it is still difficult to envision a bear market. For now, we continue to be tilted toward the optimistic side. Stay diversified. There is no need to be a hero. Your portfolio must be measured against your long-term objectives. Do not be caught up in the day-to-day noise of the markets.