As the calendar has turned to 2017, the political landscape is changing vastly, but the Federal Reserve and interest rates may be a bigger headwind for investors than anything coming out of Donald Trump's Twitter account.
"The big challenge is on interest rates rising, it's not about who is in the White House," said Kimberly Foss, CFP, best-selling author and founder of Empyrion Wealth Management. "What's going to be a challenge is the rise of rates and at which the speed the Federal Reserve does it."
In December 2016, the Federal Open Market Committee (FOMC) -- the group inside the Federal Reserve which determines interest rate policy -- raised the federal funds rate for the first time in a year, citing strength in the labor market and rising inflation as reasons. While that was expected by nearly every economic strategist and investor, what wasn't expected was the FOMC said it sees as many as three times in 2017 where it could raise rates, surpassing expectations of two rate hikes.
"There's an overwhelming sense of optimism and renewed hope in our economy," Foss said, while adding investors should be cautious about what the FOMC does over the next twelve months.
Though rising interest rates can potentially hurt high-yielding dividend stocks, there are opportunities for investors to generate yield from their portfolios, while being on the right side of the trade.
Foss noted her firm had significant exposure to dividends over the past three or four years for her clients, but as the landscape has shifted, she has become more selective about where her clients money is going.