Although there are many superficial reasons to be enthusiastic that strong market performance can continue, most positives are overstated and many risks are underappreciated. In fact, today's investment environment entails such a high degree of uncertainty that most investors would be best served by simply minimizing their worst case scenario.

Last week, I asked, “What would make 2018 more productive for you? Please email me the first thing that comes to your mind.” Before I summarize the responses, a big thank you to the 800+ people who sent me personalized responses. Someone pointed out that asking the question itself already helped because it motivated her to review her plans and targets.

The Wall Street Journal published an article on January 7 challenging the safety of municipal bonds as “not [being] the reliable bet they once were.” While its headline may startle some investors, we’ve been endorsing this view for years. Municipal bonds simply aren’t a set-it-and-forget-it choice.

Emerging markets and commodities present the best investment opportunities for this year, according to Jeffrey Gundlach. Those to avoid include the S&P 500, which he claims will show a loss for 2018. His larger warning was that most of the good news on the economic front is already priced into the capital markets.

Equity markets are widely expected to do well this year after a stellar 2017. We share the optimism, but are monitoring multiple risks—from style patterns to inflationary pressures—that could deliver surprises as the year unfolds.

In early December, small protests developed in Iran due to sharp increases in some food prices. By the last week of 2017, the protests had spread across the country and have continued into the New Year. In this report, we discuss the current protests, comparing them to the unrest that developed in the wake of the 2009 elections in Iran.

It is worth examining the nature of bubbles and the arguments that cryptocurrencies are in a bubble to determine whether the space is still worthy of investment.

As I noted this past weekend, 2017 was a year for the record books. Not surprisingly, the strong advance fostered a surge in investor optimism which pushed allocations to equities to the second highest level on record.

Last week I shared a personal story with you that, frankly, I very much enjoyed writing. It is a story about two good friends and years of hard work that has resulted in something that I believe may someday win a Nobel Prize. For my friend’s sake, I sure hope so. 

The economic calendar is about normal, with market participants back from holiday vacations (but perhaps fighting the snow). The key reports are the PPI and CPI. Inflation is the key 2018 worry for many, so these reports will get more attention. Especially if the numbers are a little hot, I expect the punditry to be asking: How worried should we be about inflation?

2018 has so far brought in the highest price of crude oil since late 2014 (chart 1), but we shouldn’t be surprised by the price action. Indeed, ignoring geopolitics for a moment, the fundamental picture for the crude markets haven’t been this favorable in years.

In the latest GMO Viewpoints -- "Bracing Yourself for a Possible Near-Term Melt-Up" -- Jeremy Grantham has a warning for bubble watchers: the next phase in this long-running bull market may be even more dizzying gains. Among the factors Grantham considers are the acceleration of price, increasing concentration like that in tech "winners," outperforming quality and low beta stocks and the role of the Fed in recent bubbles.

Blackstone is pleased to offer the following Market Commentary by Byron Wien which shares his thinking on global economic developments, market insights and other factors that may influence investment opportunities and strategies.

In addition to popping champagne corks and black-eyed peas (at least in the South) on New Year’s Day, year-end brings something else for economists and portfolio managers: annual forecasts. People want to know what the coming year will bring. I would like to know, too. But since I’m on the other side of your monitor, I must give you my own forecast. Caveat emptor applies.

Few things in this world can be predicted with accuracy over multiyear periods and fewer still over multidecade spans. One exception is population demographics. Based on data today, we have a good idea how populations will develop through 2050.

When I was young, my mother bought me a book written by Grantland Rice. Rice was one of the all-time great sports writers and I was crazy about sports. It was the type of book you could pick up and read a quick story, put down and pick up again… a new story. She later framed the above quote and hung it on my bedroom wall.

Below are five questions to help guide your thinking when making investment decisions in the new year.

In a new quarterly letter to GMO's institutional clients, head of asset allocation Ben Inker discusses why investors should be thinking about the risks of surging inflation, even if such a surge may not be inevitable or even probable. Chief investment strategist Jeremy Grantham considers the current market environment and how to most rationally take risk with the ultimate stakes on the line.

Over the weekend I stopped to watch the last part of a James Stewart Western called, The Far Country. It was the story of two cattle drivers who took their cattle all the way to the Yukon to get a piece of the late 1890’s Klondike gold rush.

The economic calendar is normal, but there are plenty of cross-currents from other major events. Bitcoin futures, the FOMC meeting, more debate on the tax legislation, the Alabama special Senate election, and an avalanche of 2018 forecasts.

Natural disaster devastation, pension and other post-employment benefit actuarial uncertainty, changing political landscapes, shrinking regional economies and complicated legal descriptions of security and default remedies all contribute to anxiety in owning municipal bonds.

Writing about blockchain and bitcoin right now is a little like buying a new computer in the 1990s. The tech was advancing so fast in those days that as soon as you brought the thing home, it was sorely outdated. Similarly, the cryptocurrency world is changing so rapidly at the moment that even before “the ink dries” on one of my posts, some important new development has already surfaced.

“Most people get interested in stocks when everyone else is,” Warren Buffett famously said. “The time to get interested is when no one else is.” The same logic applies to Christmas decorations, gold and mining stocks.

Tackling global poverty requires more than just charity. Investors can contribute to the effort—and find good sources of return potential—by focusing on companies that behave ethically or provide solutions to key poverty-related challenges.

A massive amount of stock market capitalization is tied up in companies based on both their potential market share and hypothetical future profits. The popular arguments in their favor come from looking at a company’s total addressable market (TAM). Sky high price-to-earnings ratios and massive capitalizations are common in companies with a large TAM as we finish up 2017.

Even if you don’t mislead or offend clients, if you bore them, the time and effort to communicate with clients is wasted. There are six components to doing a great job of communicating online. While some advisors get two or three of them right, almost no one nails all six … and as a result, you aren’t getting the return that you could.

A helpful way to look at inflation is the changing cost of a typical Thanksgiving dinner for 10 people. For the second straight year, the cost actually declined from the previous year’s holiday, according to the American Farm Bureau Federation (AFBF). This year’s feast, including staples such as turkey, rolls, sweet potatoes and more, fell $0.75 to a five-year low of $49.12. On an inflation-adjusted basis, that’s down more than $10 from 30 years ago. The turkey alone cost about 1.6 percent less than last year.

The economic calendar includes few reports, crammed into two days of a holiday-shortened week. Many will be taking time off – including some of the “A List” pundits. I expect to see some new faces on financial television and a lot of discussion about consumers and the economy. Many will be asking: What does Black Friday mean for the economy, and for stocks?

The bull market in U.S. equities is behind us, according to Wharton professor Jeremy Siegel, who says that the S&P 500 is now “fairly priced.”

My daughter, Brianna, and I were recently listening to a Charlie Rose interview on Bloomberg Radio. I love the way he asks direct questions. The interview featured Jeremiah Tower, a little-known chef who pioneered a restaurant revolution in the 1970s that gave rise to the culinary style known as “California Cuisine.”

Nearly 10 years after the financial crisis brought the global economy to its knees, conditions have finally improved enough to crystallize my conviction that synchronized global growth is currently underway. Revenue and earnings growth are up year-over-year, not just in the U.S. but worldwide. Despite President Donald Trump threatening to raise tariffs and tear up trade deals, global trade is accelerating. World manufacturing activity expanded to a 78-month high of 53.5 in October, with faster rates recorded in new orders, exports, employment and input prices.

Aflac (AFL) is a Dividend Aristocrat that has increased its dividend for 35 consecutive years. However, it is only one of seven Dividend Aristocrats that I consider attractively valued in light of the current bull market. Therefore, this will be the first in a series of seven articles where I will cover these seven attractively valued Dividend Aristocrats.

Mohamed El-Erian says that investors have been “enticed to become increasingly exposed to historically illiquid asset class segments.” Here are the asset classes and ETFs that are most at risk.

A review of last month’s market-moving events across countries and asset classes

This week’s On My Radar is an investment outlook piece. While current trend evidence remains bullish, you’ll see valuation data below that tells us the coming 7-, 10- and 12-year equity market returns are not so good. Your and my clients are expecting 10% forward returns; however, due to extremely high valuations they are likely get 0% to 2%. Trouble spots? There are many.

When you write about economics, you learn very quickly that the economy doesn’t care what you say about it. The forces that drive it are beyond any one person’s comprehension, much less control. But at the same time, the economy doesn’t work like a law of nature. Unlike gravity, for instance, the economy responds to human choices and preferences. We influence it, even if we don’t understand exactly how.

The aerospace and defense industry has captured investors’ attention following President Trump’s election, rising geopolitical tension and potential tax reform. What’s next? Learn about the fundamental drivers of growth in the aerospace and defense industry.

Last week I wrote that there was so much on the calendar that it was impossible to choose a single theme. This week presents the opposite problem. In the wake of the big news, what will command attention? As I studied the data, I was struck by the confluence of record results.

Value investing is under attack. The US equity market is at its most expensive level in history and has spent most of the past six years in the top quintile of expensive. In addition, value equities have underperformed the broad market and more widely growth equities for over ten years.

The Congressional Republicans rolled out an ambitious tax cut proposal last week promising a surge in economic growth, wages and employment without blowing out the deficit. Will that really be the outcome?

President Donald J. Trump nominated Jerome Powell to be chairman of the Federal Reserve Board. If confirmed, Governor Powell will replace Janet Yellen in February. Powell is smart, well-liked and respected by Republicans and Democrats alike.

The world is changing fast right now in ways that many investors might not easily recognize or want to admit. This could end up being a costly mistake. If you’re not paying attention, you could be letting opportunities pass you by without even realizing it. With that in mind, I’ve put together a list of five agents of change that I think investors need to be aware of and possibly factor into their decision-making process.

The Bank of England (BoE) has bitten the bullet and hiked the base interest rate from 0.25% to 0.5%, but in a dovish turn also provided forward guidance that outlines a very gradual path for future hikes. This was a close call with compelling arguments in favor and against.

The US economy just turned in its second consecutive quarter of 3% growth in Gross Domestic Product, to the surprise of most forecasters and the mainstream media. This despite the negative effects of two major hurricanes hitting the southern US late this summer.

Harold Evensky's most recent Newsletter.

There is so much on the calendar next week that it is impossible to choose a single theme. The economic calendar includes all the major reports. It is still the heart of earnings season. Announcements are expected about a new Fed Chair (and perhaps other appointments), the tax reform proposal, and Special Counsel Mueller’s first indictment.

So few new large mines are being discovered today, mostly because companies have had to slash exploration budgets in response to lower gold prices. Earlier this year, S&P reported that total exploration budgets for companies involved in mining nonferrous metals fell for the fourth straight year in 2016. Budgets dropped to $6.9 billion, the lowest point in 11 years. Although we’ve seen an increase in spending so far this year, it still dramatically trails the 2012 heyday.

With a light economic calendar, there is plenty of air time for pundit pontification. The record-setting market still has many shaking their heads. Many, after noting the many world problems, are asking: Where is the fear?

The governing coalition of Abe’s Liberal Democratic Party (LDP) and the smaller Komeito Party staged a big win in the snap election. Although recent public polls indicated a victory, the final tally was on the higher side of consensus expectations, including ours.