{"id":208,"date":"2017-01-16T02:52:58","date_gmt":"2017-01-16T02:52:58","guid":{"rendered":"https:\/\/nestegginvestments.co.nz\/?p=208"},"modified":"2017-01-16T02:52:58","modified_gmt":"2017-01-16T02:52:58","slug":"whats-store-2017","status":"publish","type":"post","link":"https:\/\/nestegginvestments.co.nz\/index.php\/2017\/01\/16\/whats-store-2017\/","title":{"rendered":"What’s in store for 2017?"},"content":{"rendered":"

\"\"<\/p>\n

Well, after a couple of weeks of camping, beach, BBQs, and watching too much tennis & cricket, its time to get back to thinking full time about investing.<\/span>\u00a0 <\/span><\/p>\n

Actually I never fully disengage; I\u2019m always watching what is happening with investment markets (unless I\u2019m fully off grid with no wifi, which does happen from time to time!).<\/span><\/p>\n

Fortunately, my summer break has coincided with a very healthy start to 2017 for equities, with most investment markets surging forwards over the New Year, and clients seeing a healthy growth in their portfolio values in a very short space of time.<\/span><\/p>\n

Which actually nicely highlights one of the investment principles I hold most dear.<\/span>\u00a0 <\/span>Markets do tend to surge, often unexpectedly, and its important to be invested in the market to get the benefits of days when the surges to occur.<\/span>\u00a0 <\/span><\/p>\n

A 2014 US study by JP Morgan Asset Management illustrates this nicely:<\/span><\/p>\n

An investor staying fully invested in the S&P 500 from 1993 to 2013 would have had a 9.2% annualized return.<\/span><\/p>\n

However, if they missed just the ten best days during that 10 year period, then those annualized returns would collapse to 5.4%.<\/span><\/p>\n

The obvious message here is to stay invested.<\/span>\u00a0 <\/span>Missing out on some of the best surge days will seriously reduce your returns.<\/span><\/p>\n

OK, so what are the prospects for 2017?<\/span><\/p>\n

Looking at a variety of sources, my one line assessment for the investment prospects of major asset classes over the short term (ie the next few months) are:<\/span><\/p>\n

NZ equities<\/strong>: <\/span>\u00a0<\/span>Neutral.<\/span>\u00a0 <\/span>Strong economic growth, but reasonably high company valuations.<\/span><\/p>\n

Australia equities<\/strong>: <\/span>\u00a0<\/span>Neutral.<\/span>\u00a0 <\/span>Economy rebalancing continues away from mining, but valuations are reasonable.<\/span><\/p>\n

US equities<\/strong>: <\/span>\u00a0<\/span>Neutral.<\/span>\u00a0 <\/span>Trump administration policies will boost growth prospects, but company valuations are at elevated levels.<\/span><\/p>\n

Asia equities<\/strong>: <\/span>\u00a0<\/span>Positive.<\/span>\u00a0 <\/span>China economic reform continues, strong growth prospects for Japan.<\/span><\/p>\n

European equities<\/strong>: <\/span>\u00a0<\/span>Neutral-negative.<\/span>\u00a0 <\/span>Uncertainties over Brexit, upcoming elections & future US trade policies.<\/span><\/p>\n

Emerging market equities<\/strong>: <\/span>\u00a0<\/span>Positive.<\/span>\u00a0 <\/span>Economic reforms and low valuations.<\/span><\/p>\n

Bonds<\/strong>: <\/span>\u00a0<\/span>Negative.<\/span>\u00a0 <\/span>Rising global interest rates and higher inflation likely to negatively impact bond valuations short term.<\/span><\/p>\n

Commercial property<\/strong>: <\/span>\u00a0<\/span>Neutral.<\/span>\u00a0 <\/span>Solid property fundamentals, but countered by increasing interest rates.<\/span><\/p>\n

All up, the investment market outlook for the short term is OK; not stellar but also not terrible.<\/span>\u00a0 <\/span>Let\u2019s see what actually transpires!<\/span><\/p>\n

\u00a0<\/span><\/p>\n

Dean Edwards<\/span><\/span><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Well, after a couple of weeks of camping, beach, BBQs, and watching too much tennis & cricket, its time to get back to thinking full time about investing.\u00a0 Actually I never fully disengage; I\u2019m always watching what is happening with… <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-208","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t