Posted by Susan Veligor on January 30, 2017
This is the time of year when many of us think about what should be accomplished over the coming 12 months. January offers a fresh start, a clean slate, and the days ahead are filled with possibility. We at Cornerstone, of course, think about investment perspectives for 2017; where the economy stands, the global macro issues we face and also the political wave of populism sweeping the world. What does this mean for investment return expectations? On the one hand we voted in more conservative members of our Executive and Legislative government branches which is thought to bode well for business profits. Yet continued low interest rates are hard on those in retirement who depend upon more conservative bond holdings to provide income. And the US stock market just wrapped up an 8-year bull run so valuations are very high (meaning there is little room for great growth in prices). All of this is to say we think it wise to lower your expectations for investment returns in the years ahead: it is unlikely we will see the heady US stock returns experienced since the financial crisis. Diversification is more important than ever. Think globally, invest globally.