Published by Taylor Financial Group
Volatility was certainly a major market theme for 2016. Investors who stayed invested in the markets despite this volatility were rewarded for their loyalty.
As we approach 2017 and beyond, we need to keep in mind that we may still be facing some choppy waters. The new Trump administration combined with changes in Congress, as well as a number of other factors, means the markets will likely continue to experience uneasy times. Nonetheless, we believe long-term investing has never been more important. Trends will come and go, but long-term investing usually proves to be more effective.
That being said, there are some trends forecasted for 2017 worth talking about.
Healthcare is Here to Stay
Regardless of the markets or politics, the need for Healthcare is a trend that is not going anywhere. Demographics plays a significant role here. According to Huffington Post, the oldest members of the baby boom generation turned 70 this year. But this group of nearly 75 million men and women still see themselves as young and essential and are determined to stay young, hip, and healthy. This means increased demands for newer and better medicines, treatments, and medicine technologies. Drug makers and biopharmaceutical companies will benefit from this demand. For this reason, we believe it is a good idea to own this sector.
Rise of Emerging Markets
Emerging markets have not seen the best returns since the 2008 market meltdown. However, investing in emerging markets still makes sense. Some investment research by BlackRock suggest that the strongest population growth in the world will come from the relatively young nations that will be investing in just about everything. However, emerging markets are still among the most volatile in the world. As such, we believe a good strategy is to cautiously invest in this sector.
Diversification seems to be a trend that never really goes away. No matter what the circumstances are or who is in power, we believe diversification always makes sense. Although diversification does not guarantee against loss, it is one of the most important components of pursuing long-term financial goals while striving to minimize risk.
Investing in Infrastructure
Trump has been very loud and clear about his intent to heavily invest in America’s infrastructure. As he stated, he wants to rebuild highways, bridges, tunnels, airports, and the list goes on. According to the American Society of Civil Engineers, the U.S. would need about $4 trillion to update the things Trump has talked about, and Trump has already called for a $1 trillion investment. Whether Congress will pass this infrastructure plan is still unknown, but the trend for infrastructure investment exists – in fact, individual infrastructure companies have already appreciated significantly.
The New Year is bound to have many more trends as the year progresses. Since there’s no assured way to determine what will happen in the markets and in politics, we continue to urge our clients to stay focused on the long-term and invest accordingly.
If you have any questions or want to review your portfolio, please do not hesitate to contact our office.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss. Investing involves risk including loss of principal. Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.