In some respects the stock market’s behavior in December was even more surprising than in November, since the initial shock of Donald Trump’s unexpected victory had worn off and investors had time to collect themselves and take a hard look at the overall financial picture. The Fed raised interest rates and holiday sales started out on the light side, but most people seemed to like what they saw driving the stock market indexes to record levels in the process.

The S&P 500 Index closed November at 2198 after posting a 3.4% gain for the month, and then pushed forward to tack on another 1.8% increase in December. For the year as a whole the index gained 9.5%, close to its historical average annual return.  From a longer term perspective, the S&P is now up nearly 80% from where it was only five years ago. Not bad considering the witch’s brew of global economic chaos swirling around it in China and Europe the past couple of years.

But all of that is now in the past; here we are at the onset of a new year, with a soon-to-be new U.S. president. It’s worth noting that Trump’s inauguration on Jan. 20 will take place smack dab in the middle of year-end earnings reports from many important companies, so don’t be surprised if we see more volatility heading into those events. We’ll also get a final accounting on holiday sales later this month, which could exaggerate the market’s movement in either direction.

With respect to our portfolio, we closed five positions in December. Four of them delivered excellent annual results: RUTH (+47.6%), LMAT (+115.8%), BKE (+102.5%) and DLPH (+55.9%). We did have one big loser for the month, as GNC stumbled to a 17.7% loss (-122.2% annualized). However, on the whole December was very good for us, with those five trades delivering an average annualized gain of 39.9%.

We also issued our first “3TL” (3 Time Loser) alert in December for CTAS, which quickly paid off for those who bought put options on it. We issued our second 3TL alert on AAP last week, and if it does well then I will try to issue at least one each month in addition to our normal buy recommendations like the currently open positions summarized on the pages that follow.