2017: No Reason For Gloom & Doom But No Reason For Euphoria Either

Dirk SteinhoffA year full of surprises, plot twists and failed predictions is now behind us and, from what we know so far, 2017 is poised to be equally interesting.

The political, economic and social tensions that brought us Brexit, the Trump victory in the US elections and the roaring “NO” vote of the Italian referendum are by no means resolved or overcome. With key elections in Europe scheduled for the year ahead, the wave of anti-establishment sentiment has the potential to bring about fundamental changes in the political and economic landscape. The future of the Eurozone and the vision of European integration hangs in the balance, as the ongoing immigration crisis and the continent’s deeply troubled banking sector sets the stage for another year of uncertainty, further amplifying investors’ unease.

There will be no shortage of uncertainty and turbulence in the US either. While the first 100 days of the Trump administration are expected to give us a clear idea of the new policy direction, a bumpy transitional phase will likely perturb the markets, increase volatility and put pressure on investors. So far, Trump’s campaign promises, his most recent statements, as well as his cabinet picks have sent mixed messages about the future of the country’s economy. The prospect of deregulation and tax cuts has triggered and sustained the markets’ “Trump rally”. However, concerns over an aggressive trade policy, combined with increased government spending and compounding US debt, are all grounds for a more tempered and cautious outlook.

Finally, while politics will likely continue to dominate the front pages and influence the markets for months to come, it is still important to resist the distractions, remain focused on the fundamentals and keep an eye out for significant developments and trends that do not make the headlines. 

Our own approach, based on extensive and balanced analysis, enables us to identify solid and sustainable opportunities, even in uncertain times like these. In this InSights, we look into the cybersecurity industry and its prospects, examining its growth factors and exploring investment options.

As for the year ahead, our philosophy at BFI is to remain wary of both premature enthusiasm and doomsday predictions alike. Instead, we focus on the facts while vigilantly observing developments in the markets, in the economy and in the political arena in order to form and adapt our positions, plan ahead and advise our clients accordingly.

This is from the Editorial of the latest BFI Insights (Q1 of 2017). If you would like us to send you a PDF version, please send an e-mail to info@mountainvision.com

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