Over the past year, we’ve seen positive momentum globally in the markets. Returns were very strong across asset classes. In equities, there was a continuation of strength, with double-digit returns globally, led by emerging market returns. The major fixed income indices are all positive, with munis on top. Also, alternatives have performed better than 2016, especially long-short equity.
So what does this mean for the year to come?
2018 appears to be a strong year from a macro standpoint, with strengthening global growth, low inflation and still broadly accommodative policy setting a benign backdrop for risk assets. But it’s important to note that risks have moved higher including political, populist and geopolitical risks. There are growing concerns as to when fiscal policy may step in, and if and when further monetary tightening may reach a point of changing the current course of the markets. The issue for investors now is where to find growth, while not taking on too much risk. It’s been a long time since we’ve had a notable correction, so it’s important for investors to determine how to participate and also defend in this environment. Ultimately, we believe being selective is important in 2018 as global growth continues to improve.
Learn more in this quarter’s Capital Markets Outlook.