What 2016’s Signals Mean for 2017’s Outlook
Signal or Noise Quarterly Newsletter | Q4 2016
By Mark Okada, Co-founder & Chief Investment Officer | February 2017
We begin 2017 in an unusual environment where we see both opportunity and volatility ahead. To fully capture this unique outlook, we look back at the key signals we identified in 2016 and explore their investment implications for the year ahead.
Revisiting these signals shows just how different things are today compared to this time last year.
In early February of 2016 risk assets were still tumbling from the start of the year, with the steady declines continuing through the middle of the month.
Today, conditions couldn’t be more different. So far in 2017 we’ve seen Dow 20,000, rising PMIs and increased consumer confidence. Markets are still holding onto the post-election enthusiasm; however, we resist the idea of the “Trump rally” and instead believe the Republican sweep and the positive economic data heading into the election are responsible for the market optimism.
We, too, are optimistic about 2017, but expect volatility to be a major force throughout the year. In the newsletter we look at how investors can position themselves to thrive in this unique environment.