The US stock market, as measured by the Dow Jones Industrial average, has now experienced six consecutive days of losses. This has not happened since 2011.

The markets may be questioning whether the new administration will be able to execute on plans that include tax reform, reduced governmental regulation, better trade arrangements and fiscal stimulus. Concerns heightened last week, after the administration withdrew its bill designed to replace the Affordable Care Act (aka Obamacare).

While we obviously like to see positive investment returns, we are actually somewhat relieved to see the market settle a bit in the aftermath of the rather aggressive run-up that occurred after the November presidential election. We felt that the markets were taking a very optimistic view of the new president’s ability to deliver on campaign promises designed to spur the economy.

We would encourage a degree of caution as the administration turns its attention to tax reform. It is not clear that the President will be able to unite Republicans, much less bring in Democrats, in his effort to reform the tax code and reduce taxes. If the President fails to deliver meaningful tax reform, the markets will likely respond negatively.

On a more encouraging note, the Eurozone stock markets are finally emerging from an extended malaise. The Euro Stoxx index has actually risen more than the S&P 500 index for the year to date. This is encouraging. It also reinforces the principle that investors should hold highly diversified portfolios that are allocated across (and within) many asset classes.

As always, we welcome your comments and questions.