Monday, January 1, 2018

Investment Perspectives: Forecast 2018

Forecast 2018: Another year of solidly positive economic growth with an added impulse coming from the recently passed legislation on tax reform.

You can read the full Investment Perspectives here.

In this month's issue:

"2017 Scorecard"
Mark Luschini
It’s that time of the year when reflection and prognostication tend to intersect. Last month we published our outlook for 2018, so the subsequent critique of its forecast will occur in real time throughout the year and likely conclude with a similar review to that which follows, evaluating its overall accuracy. Having said that, we invite you to read Outlook 2018: A Year of Positive But Shifting Forces. It is noteworthy that, as it relates to the economy and equity markets, we expect the new year to unfold much like last year—at least directionally, if not by order of magnitude. In this month’s issue, however, we reflect on our calls for the year past, accompanied by a vignette from our Outlook 2018 to offer a glimpse into where we believe we are headed.

"4 Key Issues for 2018"
Guy LeBas
Bells are ringing in 2018, and we all know what that means: A 2028 maturity bond is now a 10-year, your author will spend the next month writing the wrong date on checks, and it’s time for a Key Issues discussion in Investment Perspectives. Last year, we focused on inflation, the value of the dollar, international trade, and tax policy as the major drivers of interest rates and the macroeconomic trajectory. While trade turned out to largely be a dud, inflation (or the lack thereof) and tax policy (a late addition) did indeed become huge influences on the outlook and financial markets. For the coming year, we have one repeat and three new additions to the list.

"Is This as Good as It Gets?"
Greg Drahuschak
After a year of multiple records and gains across a wide spectrum of the domestic and foreign equity markets, some investors exited 2017 wondering if it was the best they can expect from the current bull market. We could make this report short by simply answering the question posed in the title with a simple “no.” In fact, a big market gain in one year fairly frequently has been followed by a big gain the next year. But the 2018 equity market is likely to have a different character than was present through 2017.