Why did the markets go up after the U.S. election? Analysts thought they’d go down, proving once again that markets don’t always follow predictions. Roger Nusbaum of AdvisorShares offers advice on how to shield your investments from the unexpected. The chief investment strategist at the world’s largest money management firm believes we’ll see reflation in the U.S., with rising growth, wages and inflation. Richard Turnill of BlackRock shares his outlook on how this may affect world markets. Russ Koesterich thinks rising inflation makes U.S. stocks expensive relative to history and other countries. He suggests two strategies investors can use to respond to the economic shifts. If history is any guide, Donald Trump may face a recession during his term in office. In fact, every Republican president since World War II has been in power during at least one recession. Rich Miller of Bloomberg takes a look back at history to see what the future may hold during the next four years.
No, This Time is Not Different– A day or two after the election someone (not a Trump fan) asked Roger Nusbaum of AdvisorShares about selling out of the market as they apparently thought the market would go down. This is a great example of something that repeats over and over in the market and the thought process of market participants. Markets do the “unexpected” all the time and this might be what has occurred here. Certainly, there will be instances in the future where one outcome seems certain but then the opposite will happen. This is exactly why having a disciplined investment process that you can stick to is so important as opposed to guessing as to whether some event, like an election, will be good or bad for markets. Read more…
BlackRock’s Global Investment Outlook For 2017– BlackRock, the world’s largest money management firm, expects U.S.-led reflation − rising nominal growth, wages and inflation − to accelerate, and sees fiscal expansion gradually replacing monetary policy as an economic growth and market driver around the world. Read more…
The Latest Risk For Stocks– Stocks have been helped by low rates and low inflation. Russ Koesterich suggests that may be changing. Equities continue to grind out new record highs, leaving U.S. stocks expensive relative to both history and other countries. Many investors believe the high valuations are justified given still historically low interest rates and inflation. Unfortunately, the regime may be changing in a way that would be less friendly to elevated equity multiples. One dimension of that change is inflation. Read more…
No GOP Leader Since World War II Has Dodged A Downturn– Every Republican president since World War II has been in power during at least one recession. Our course, as the saying goes, past performance is not necessarily indicative of future results and the billionaire developer may well avoid a downturn on his watch. But with the economic expansion soon to become the third-longest on record, the risk of a contraction occurring during his time in office can’t be cavalierly dismissed. Read more…
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Merry Christmas To All,
John R. Day, Bill Ennis, Stephanie Davidson and Matt Heller