Year-end review and 2019 outlook

Also Interesting

• Value Stocks: Trapped or Spring-Loaded?
• Will the market sell-off continue?
• Downgrading Europe and Japan

Back to Reality

2018 has been a disappointing year for investors. After the stellar investment returns of 2017, perhaps it was always likely to feel this way. As the Goldilocks economic environment of 2017 gave way to a more difficult situation from around February, a series of volatility waves damaged asset class returns. In fact, of the main asset classes, only US equities and the US dollar have recorded gains in 2018. Other asset classes are either flat or have delivered negative returns (Figure 1). Performance has been most disappointing in emerging markets – local currency debt is down by high-single digits while emerging-market equities are down by double digits this year (albeit with significant regional variations).