It Can’t Always Be Rainbows and Unicorns

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Baseball great Yogi Berra lamented the trouble with forecasting saying, “It's tough to make predictions, especially about the future.” When it comes to the market, there is an additional monkey wrench in the mix. The better things get, the more bullish forecasts become – setting investors up for possible disappointment. Yes, earnings are expected to grow double digits in 2018 and the economy is accelerating. But positive surprises will become more rare as estimates are ratcheted up. If investors are expecting perfection, they may get rattled by a line up which is not always straight. And let’s face it, volatility can’t really go much lower than the basement levels of 2017 so it will likely be higher this year. Don’t let short term day-to-day events cloud your longer-term investing outlook. Today the non-farms payroll report was disappointing with 148,000 jobs added in December, but wages continue to trend higher and the lower than expected headline number may help keep aggressive Fed action at bay. The ISM nonmanufacturing was also a slight miss – down to 55.9% from 57.4%, but still firmly expansionary. Resolve to make 2018 the year when you don’t succumb to knee-jerk, reactionary behavior. Yogi Berra also said, “If the world were perfect, it wouldn’t be.” Please review the benefits of an effectively diversified portfolio on page 4 of the Global Perspectives™ book.

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