Investment Perspectives, January 2017

The markets had a very poor start in 2016 due to concerns about China’s economy and weak commodity prices, before moving slightly higher until early summer. The June 23rd UK referendum, resulting in Brexit, was an unexpected shock which triggered another correction of equities and a collapse of Sterling. However, equity markets erased their losses within weeks before entering into a period of stability. Surprisingly the unexpected victory of Donald Trump triggered only a very short-lived bid for safe-haven assets, as risk assets recovered almost instantly and ended the year on a bullish note.

2016 will most likely also be remembered as the year when a 35-year bond rally finally came to an end.

The economic outlook for 2017 appears more promising as global growth will be more balanced and concerns about China and emerging markets have receded. The main risks for 2017 are of a political nature, with important elections taking place in key European countries and the ability of Donald Trump to introduce new policies, as expectations are rather elevated. The main central banks remain accommodative, even if they have started to imply that their interventions have limits and cannot go on forever.

EXECUTIVE SUMMARY

  • 2016: REVIEW OF OUR INVESTMENT THEMES
  • 2016: ECONOMIC & POLITICAL DEVELOPMENTS
  • 2015: THE FINANCIAL MARKETS
    • Equities
    • Commodities
    • Debt instruments, currencies
    • Hedge funds
  • 2017: ECONOMIC OUTLOOK
  • 2017: FINANCIAL MARKETS’ OUTLOOK
  • 2017: ASSET ALLOCATION
    • Debt instruments
    • Equities
    • Commodities
    • Gold
    • Hedge funds
    • FFG portfolio construction
    • Hedge fund managers/structured products
    • Asset allocation grid

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Tags: Investment outlook