Last year at this time, the Economist magazine (of which I am an adherent) published their Year Ahead issue predicting death and turmoil in a dark occult context, using tarot cards and cryptic symbolism.
Most ominous was the Death card which featured a Skelton sitting on a white horse, a nuclear mushroom in the background. An eye-catching cover to be sure, one of my favourites, but hardly accurate on this front. No war with North Korea, but there was the death of ISIS in Syria and Iraq, but neither of those qualify as apocalyptic outcomes, quite the contrary to be sure.
Another of the cards featured the Tower, showing it being destroyed by lightening from above. A reference to the Tower of Babel being destroyed by God, and one that is usually associated with danger, crisis, destruction and liberation. Here the Economist may have got it right, with the Supranational One-World Government ethos characterized by Big Government and Big Spending in retreat. Right wing governments including notably in the United States moving in the exact opposite direction of the previous administrations, re-writing almost everything that was done before. The UK is proceeding with Brexit and Germany is now in the midst of a political crisis, where Angela Merkel seems unable to form a coalition government. Member states in Europe are pushing back on demands from the European Parliament and the voices of the people are once again being heard.
Well, clever magazine jackets aside (mystical or otherwise), the year that was 2017 is finishing with the largest economies growing, the stock markets at record levels and the world in many ways, in better shape than it was at the start of the year (North Korea being a notable exception). So, what of the Trump effect? Well, as the media's Man of the Year (even if Time Magazine failed to put him on their cover), he has had an undeniable impact on politics nationally and internationally. Trump ran a campaign that promised to disrupt the political status quo, and he has certainly done that. His tax reforms are set to be passed next week (as I write this) and included in the bill is the repeal of the Individual Mandate -a requisite that will mean certain death for Obamacare. A new Supreme Court judge favourable to Republican views and a fundamental re-set of US foreign policy count among his successes in his 1st year in office.
So, what does 2018 hold in store for us? The similarly cryptic cover of this year's Economist requires a working knowledge of Sanskrit to make sense of it. Each symbol portends what the publishers believe will unfold, an in an order that that can only be understood if one determines whether to read this right-to-left, topto-bottom or otherwise. Our crystal ball tells us the following is likely to unfold in the upcoming year:
*markets will see greater volatility, with some large indexes finishing the year lower *the global economy will continue to expand, though struggle to achieve 3%+ growth *interest rates will continue to rise, unevenly and slowly *Trump will dominate news, thought his impact will seem muted after this year's effect *a new Provincial government here in Ontario after 15 years of Liberal rule *geo-political tensions will remain high, with the newnew magnifying uncertainty *the world will start and finish in unremarkable fashion, with things looking pretty much as they do right now. A Tempest in a Tea Cup year when the curtain falls.
But crystal balls are notoriously inaccurate, so we'll just have to live through it to know how it finishes. In the meantime, our model portfolios are finishing the year up, with solid, modest returns reflecting their lowmoderate risk profile. Steady as she goes, and look for a call from myself and my team in early 2018 to discuss individual asset allocation and additional return opportunities that lie ahead.
I wish you and your families a very Merry Christmas and a Happy and Prosperous New Year! And look forward to speaking with you in 2018!