As interesting and sometimes even amusing as it is to look back in time and reflect, as investors we get paid for looking forward and anticipating what may come. In this respect there’s a few existing trends and themes that will remain front of mind for me this year and will be key to keep on your radar in understanding the risks and opportunities in 2018.
Following is a selection of the key charts and indicators, the themes span inflation, monetary policy, commodities, China, emerging markets, corporate bonds, global equities, volatility, and bond yields. In other words, all the issues and topics that most active asset allocators should be thinking about. I'll be covering these topics in more detail in the coming weeks.
I've said it before and I'll say it again: 2018 is going to be harder and more complex for investors than 2017. The cross currents of rising valuations across asset classes and markets, maturing of the business cycle at a global level, and the turning of the tides in monetary policy could make 2018 a watershed year.
That all said, here's the charts! Best wishes and best of luck for 2018.
- Much better cyclical economic prospects across developed economies has seen measures of industrial capacity and labor market tightness return to pre-crisis levels. This is probably the best leading indicator of a rise in inflationary pressures and reflects a maturing global business cycle.