Run Forrest Run

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Run Forrest Run


It was as if the market and the economy picked the slogan from the 1994 blockbuster movie Forrest Gump as their mantra in 2017 as everything from corporate earnings to equity markets to consumer confidence and all economic indicators continued to run throughout 2017 and into 2018 and haven’t even stopped to look back once. 


So what can we expect in 2018?  Economic indicators continue to be solid and show signs of growth albeit at a slower pace.  Current equity valuations seem high but are mostly supported by earnings growth which will continue to benefit from U.S. tax reform further supporting corporate profits and fueling continued growth in equity valuations.


There are risks though, geopolitical risk between U.S./North Korea and/or NAFTA renegotiation and overall protectionism sentiment could result in inflation and slower growth either of which could put downward pressure on equity markets.  We are also seeing interest rates rise, reversing the trend of the last 10 years which will stifle growth somewhat.


Therefore, at this juncture given stretched valuations and the fact that we haven’t had any sort of market correction in recent memory yet continued positive economic data and no signs of recession, it is best to have a neutral risk (balanced portfolio) position right now.  Not overly aggressive, but definitely not conservative.


Todd T. Hopper BA, CFP

Certified Financial Planner

Account Representative, Manulife Securities Investment Services Inc.

Life Insurance Advisor, Vision Wealth Consultants Inc.