Link to Part 4
Link to Part 5
At last, it's time to close our year-end message for 2017:
Herein we've presented what we believe to be the characteristics of good portfolio managers. We've expressed the sense of security we gain in the understanding that while not all good investments make money, if we strive to make only good investments the odds are strongly in our clients' favor over the long-term. We highlighted the whys and wherefores of the sectors we presently like and those we don't. We shared our views on the importance of maintaining a global investment mindset. We expounded on why we think that (despite valuation) many currency traders once again may be on the wrong side of the dollar going into 2018 -- and how it's perfectly okay for our portfolios if they're right this time. And we discussed the not-so-safe nature of today's bond market as well as our presently not so bullish view of precious metals.
Link to Part 4
The Dollar:
Several times in this year's lengthy final message we've cited the potential for a rising U.S. dollar to be a headwind for a number of sectors, as well as foreign equities, in the year to come.
Our view is that a relatively strong U.S. economy, aided by the potential near-term positives of corporate tax reform, not to mention an infrastructure spending package (should it happen), along with a higher interest rate regime, and a Fed that is no longer reinvesting all of the income from its massive balance sheet, are factors that stand to support the dollar -- if not see it rising -- going forward.
Yes, 2017 has been a very good year for equity investors. Honestly, given the overall setup going in, a good 2017 should have been no big surprise to anyone. What has been surprising to us, however, is the remarkably low level of volatility! Make no mistake folks, in that regard, 2017 was highly unusual.
Link to Part 1
Link to Part 2
Link to Part 3, Section 1
Link to Part 3, Section 2
Link to Part 3, Section 3
If there's been a common theme over all the years we've been blogging, and, for that matter, managing money, it's that the world is a very big place, and the U.S., in terms of its share of the world's human capital, is a very small place. While we can debate the causes of the miracle that makes the home of a mere 4% of the world's population the far and away world's largest economy, we can't deny the fact that the human race is becoming more connected by the minute and, thus, the nations and institutions that embrace the interdependence that this global connectivity breeds -- while successfully navigating the at times turbulent geopolitical waters -- will prosper the most in the decades to come.
Link to Part 1
Link to Part 2
Link to Part 3, Section 1
Link to Part 3, Section 2
Here's a brief synopsis of what we view as today's fundamental aspects of the healthcare, utilities, telecom, consumer staples and reit sectors. We want to emphasize "brief", as we could easily offer up a lengthy research paper for each.
Note, the following relates primarily to the prospects for sectors within the U.S. economy. Our targets are also influenced by our assessment of each sector within other countries -- as we maintain target allocations to foreign markets as well. A topic we'll tackle in Part 4.
Link to Part 1
Link to Part 2
Link to Part 3, Section 1
Here's a brief synopsis of what we view as today's fundamental aspects of the industrial, materials, energy and consumer discretionary sectors. We want to emphasize "brief", as we could easily offer up a lengthy research paper for each.
Link to Part 1
Link to Part 2
Along with our perspective on general conditions, in our year-end letters we like to offer up some detail in terms of what inspires our sector weightings going into the new year. After bullet-pointing financials and tech below, I realized that if I carry this year's narrative through each major sector in one post I'd be asking our readers to devote far too much of their precious time herein, especially during the holiday season. So we'll stop this one at technology, and dribble out the rest between now and the end of the year.
