The most useful piece of advice one could have offered investors at the beginning of 2017 might have been ‘never mind the politics’. Despite misjudged general elections and ongoing Brexit negotiations in the UK, the almost total ineffectiveness of Donald Trump in the US and an unhelpful Federal election result in Germany, investment markets have continued to rise. Markets are, for now at least, completely oblivious to the circus of global politics. This is evident in the fact that 2017 saw the lowest equity market volatility since the 1960s, with the key development for investors being, not the antics of Mr Trump, but accelerating economic growth. This underpinned corporate earnings growth and took share prices to a series of new highs. In this note, we briefl y look back on the investment landscape in 2017, before addressing the question of whether the tailwinds from this year will continue into 2018.
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