Invesco Canada blog

Insights, commentary and investing expertise

2018 Investment Outlook: What to expect in 2018

Global markets continued to climb throughout 2017, across virtually all asset classes. Can this performance continue through 2018? Five of Invesco’s global CIOs discuss their base-case expectations for market performance in the year ahead.

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2018 Investment Outlook: Looking for opportunity in private equity and stressed credit

The overall global macroeconomic picture saw gradual improvement in 2017, aided by continued supportive monetary policy from central banks throughout key economic centers. We entered the year expecting volatility, in part due to the implications of the U.S. presidential election. However, lower volatility took hold as markets grew comfortable with a range of uncertain issues, including potential policy changes from Washington, China’s economy and the overall interest rate and commodity environment. We expect that 2018 may see an increase in volatility as the economic expansion in the U.S. enters its ninth year.1 While our base view is for a continuation of the current economic expansion, there is a higher degree of uncertainty beyond 2018. We are monitoring several key themes that each play an important role in the private equity and stressed credit universes.

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2018 Investment Outlook: Global equities: Risks, uncertainties, and opportunities

Short-term forecasting is a fun, but not often a particularly profitable, exercise. To think one can predict what the next year holds is folly, and to assume you could profit from that prognostication is dubious. In 2016, would you have predicted Donald Trump would be inaugurated in 2017 as the next U.S. president? If so, how would you have expected markets to react? Consider everything we’ve seen in the past year or so:

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2018 Investment Outlook: Global fixed income markets look well-supported by macro factors

Macro

The current investing environment seems daunting. Markets have had a strong couple of years and valuations are tight. At the same time, risks abound. Geopolitical risks including North Korea, terrorism, Brexit and unpredictable politics in Europe and the U.S. make for an uncomfortable investing environment. In such uncertain times, it is important to use an investing framework to help manage through the many risks in the markets, to remind us of the markets’ key driving forces and to help measure the impact of events or potential risks.

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2018 Investment Outlook: More markets are thriving, but it’s critical to understand regional nuances

An increasingly synchronized economic upswing, the first since the global financial crisis, continues to support real estate market fundamentals around the world. More markets are now doing well, notably several in Continental Europe. This is a great positive and is creating opportunities for real estate investors.

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Three macro trends to be thankful for


November 21, 2017
Subject | Institutional | Invesco | Macro views | Trimark

This week marks Thanksgiving in America. This coming Thursday we will break bread and devour turkey with family and friends and, most importantly, take time to show gratitude for that which is good in our lives. The act of showing gratitude and giving thanks is a universal concept and one that I would like to indulge in this week’s commentary. In that spirit, I take stock of the past year and share with you three market and economic trends for which I am thankful:

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Interest rate outlook: Bank of Canada to pause

After raising the target overnight rate 0.25 percentage points at each of the previous two meetings, the Bank of Canada (BoC) kept the rate unchanged at its meeting on October 25, 2017. While growth has remained strong, it has slowed from the second quarter and the BoC appears ready to give its two previous rate hikes time to filter through the economy before taking further action. Additional uncertainty around the breakdown in North American Free Trade Agreement trade negotiations leaves the BoC cautious regarding future hikes. The Canadian 10-year yield appears to have peaked for the moment and yields have several reasons to fall from current levels, in our view.

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How vulnerable is the stock market?


November 14, 2017
Subject | Institutional | Invesco | Macro views

Last week saw the U.S. Senate introduce its version of the tax reform bill, which caused some concern among investors. The Senate version of the bill delayed the much-anticipated corporate tax cut until 2019. In addition, because it has some significant differences from the House bill, it raised uncertainty about Congress’ ability to pass tax reform this year – or at all.

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What is ESG, and why should investors care?


November 8, 2017
Subject | Institutional

Shoppers looking for “healthy food” must contend with a growing number of labels: organic, low-calorie, non-GMO, all-natural and many more. What you choose depends on your personal preferences and goals. Increasingly, investors are finding themselves in a similar situation. Almost 70% of investors think it’s important to invest in companies with a positive social impact.1 But sorting through the vocabulary of responsible investing can be confusing.

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Nine things to watch in November

Despite October’s reputation as a precarious month for stocks, the equity markets made it through the month without so much as a hiccup, let alone a correction. Last month commemorated the 30th anniversary of the 1987 market drop, but investors did not get spooked by the supposed “October effect.” With October behind us, it is now an opportune time to keep in mind some of the things we will want to look for in November and beyond.

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Say goodbye to closet indexers


November 1, 2017
Subject | Active management | Institutional | Trimark

I’m writing here in response to questions I’ve received from advisors and to piggyback on comments I’ve made at our recent due diligence events. First, I’m going to dispense with the strict “active vs. passive” construct of the current debate. I’ll make my case for the value of true active management and introduce you to the elements of a portfolio that I believe make it truly active. I’m going to cover a lot of ground here, but I’ll do my best to keep it concise.

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Why haven’t geopolitical headlines rattled the markets?


October 31, 2017
Subject | Institutional | Macro views

Geopolitical risk has risen in many areas of the world, and we saw several key issues escalate last week. When I travel and meet with clients, I’m increasingly asked why markets don’t reflect these growing risks. Part of the answer is that markets have simply become somewhat immune to it. However, I also believe that two key factors have helped cushion capital markets from the impact of geopolitical risk: accommodative monetary policy and the growing global economy. In this week’s commentary, I discuss all of these competing market forces. 

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Why EM? Why now?


October 27, 2017
Subject | Institutional

I’ve said it before, and I’ll say it again: I believe investing in emerging markets (EM) is best done using a truly active approach. Performance numbers tell one part of story – I’ll cover the numbers a little later in this post – but other elements of the “why active in EM” story are: managing risk, long-term growth potential, and understanding complex and unfamiliar local markets.

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Asian leaders retain power; questions surround central banks


October 24, 2017
Subject | Institutional | Macro views

The last 18 months have seen a rejection of the status quo in multiple elections, from the Brexit vote to the U.S. presidential election to the recent Catalonia vote. Last week, we saw the U.S. and U.K. continue to work through the changes stemming from their elections – and we saw one key region buck this trend and embrace the status quo as the way to move forward.

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