JFL

April 26, 2018

Investment Outlook Q1 2018

Economic Review

  • Investor confidence was shaken by talk of trade wars, the returof inflation, interest rate increases, and the potential regulatory clampdown on the use of online users’ data.
  • Recent leading indicators are still not pointing to elevated recession risks, and earnings momentum is positive which suggests a resumption in market gains.
  • The U.S. Federal Reserve has essentially been matching the rise in economic growth with equivalent increases in interest rates.

Investment Outlook

  • We anticipate that this period of uncertainty will subside over the next quarter as solid economic fundamentals reassure investors.
  • Near term, a continuation of the bull market for equities is expected; however, longer-term concerns are building.
  • Our strength in selecting high-quality businesses at historically reasonable valuations should provide portfolios with the ability to withstand the inevitable market shocks.

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