- 2017 was quite a year in the stock markets. Clients may be asking you what to look for in 2018.
- Get some new ideas from Tom Wald, Transamerica Asset Management Inc. chief investment officer, an experienced professional with decades in the industry.
- Investors are being barraged with news and terms — tax reform, corporate profits, repatriation — they look to you to help them sort it all out.
Looking back, 2017 was an unusual year with the Dow Jones Industrial Average (the Dow) total return up 28%, the S&P 500® up 22%, Nasdaq up 28%, and International equities up as well.
But, as they say, past performance is no guarantee of future results. What will 2018 bring?
In his 2018 Outlook, “Answering the Bell,” Tom Wald, CFA®, chief investment officer for Transamerica Asset Management (TAM) Inc., looks ahead to a year that appears poised to build on the economy’s recent showing — but with some surprises possible along the way.
“U.S. stocks continue to be well positioned, and we believe potential double-digit total returns for the major indexes is achievable, based on earnings growth, a strengthening economy, and recently passed Tax Reform legislation,” Wald wrote in his comprehensive Outlook.
In his role with TAM, Wald is responsible for overseeing mutual fund product management and sub-advisor selection process. He has more than 25 years of investment experience and has managed large mutual funds and sub-advised separate account portfolios.
Wald examines the potential effects of Tax Reform, wage growth and consumer spending, interest rates, and the pace of global economic growth.
He also explains his theory that markets are in their second bull run since the Great Recession, not continuing one long run.
“We believe the secular bull market in stocks that began in March of 2009 actually ended in November of 2014 when the Federal Reserve officially concluded Quantitative Easing,” he wrote, adding major indexes underwent a period of consolidation from 2014 to 2016 before breaking higher and beginning the separate and distinct bull market now underway.
But while Wald believes investors may see a favorable environment, investing is not without risk, including the possible re-emergence of market volatility, increasing federal deficits, and the pending implementation of Brexit — Great Britain’s break from the European Union.
Additionally, Wald explores the potential of a 10% equity market correction along the way (which he views as a potential buying opportunity) and even geopolitical uncertainty.
In summary, Wald believes there will be more working for investors than against them in the year ahead, noting “we believe there is a lot to like about the market environment heading into 2018 and beyond.
Download Wald’s 2018 Outlook for his complete thoughts on the year ahead, including detailed charts that help explain his reasoning and thought process.
Things to Consider:
- CIO Tom Wald’s 2018 Market Outlook can be a good conversation starter with clients as they look ahead to the new year.
- While there are no guarantees in the markets, Wald believes there are good signs for investors.
- Wald believes we are currently in the second of two bull markets since the Great Recession, not in the middle of one long run.
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, legal or financial advice or guidance. Please consult your personal independent advisors for answers to your specific questions.