Market Notebook


Strong Week for Global Equities and Commodities

Last week was a strong week for global equities and commodities, helping to push equity prices back towards their all time highs. VT, Vanguard’s Total World ETF returned nearly 24% on a total return basis. 2017 will go down in the books as one of the best years on record for global equities.

Real Economy Appears Strong

As 2018 arrives, economic indicators appear strong. There are virtually no signs of recession on the horizon in the short term. If the current bull market comes to an end in the next few months, it is not likely to be caused by what is going on in the real economy.

When Will the Bull Market End?

Given the above, the question most ofen asked is, “When will the bull market end?”, or in other words, “When should one become defensive given all the recent gains?” To quote Anne Kates Smith in the October 2017 issue of Kiplinger’s magazine, “The payoff in the final year of a bull market is historically generous, with returns, including dividends, averaging 25% in the final 12 months and 16% in the final six months”. The clear risk, therefore, is becoming defensive too early.

Enjoy 2017, Looking Forward to 2018

Enjoy the final few hours of 2017. The next market notebook will see the total return figures reset as the 2018 market landscape begins to unfold anew.

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