Given the expectation for the U.S. economy to grow at a modest pace for the eighth year in a row, the risk of the U.S. economy or inflation becoming “overheated” in 2017 remains low. The Fed will likely move the federal funds rate higher twice in 2017, once in the first half and again late in the year. There are still important headwinds to consider, like a stronger dollar that will hamper trade for large multinational companies and continued geopolitical risk.
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Enterprising families are showing an increased interest in participating in direct investments around the globe. Some families have turned to private equity out of frustration with the volatility in the public markets and the unexpected correlations between asset classes that occurred during the 2008-2010 timeframe. The factors that impact their private equity portfolios’ success are complex in nature, and there are 15 key considerations that inform families’ preferences for private investments, and, ultimately, impact how well they will do.
Although markets got off to a calmer start in 2017 than it did in 2016, this year may still be one of the most difficult years for long-term investors in recent memory. There is little basis on which to anticipate the policy actions of the new administration and there is substantial potential for large scale change. There will be opportunities to make money, but there will also be many red herrings. Investors, money managers, and wealth advisors will all be challenged to have discipline this year.
What do families tend to underestimate or overlook in the due diligence process? A single misstep in understanding the market the target business operates in, evaluating the sustainability of product line and customer level profitability, or assessing and motivating the management team, can wipe out a generation of wealth and reputation. Jason Abbott and Bill Clogg from FTI Consulting’s Transaction Services practice led a discussion on the most critical commercial, operational and financial due diligence steps involved in acquiring a business or property.
At the beginning of 2016 many growth markets were experiencing a drop in economic performance and weaker growth predictions, which led to several commentators and investors questioning the future role of these markets as leaders of global growth. In their view, the growth markets’ era was over. However, growth is now projected to return to certain developing markets by 2017—most notably Brazil, Nigeria and Russia.
This webinar gave an overview of how family offices have been “chasing Yale” in pursuit of double digit portfolio returns.
Many are nervous, curious, and even excited for the potential impact of the Trump administration on their portfolios and the economy. In this Hot Topic Webinar, Stephen Kolano of BNY Mellon Wealth Management led a discussion on some of the major events and highlights that set the stage for 2017, plus the key catalysts to watch for in the coming year. In addition, he dove into the policy and geopolitical issues affecting our industry, both domestically and globally, as well as investment implications and areas to consider regarding portfolio positioning.
Heading into 2017, the top five investment themes center around prolonged expansion, inflation rising, a new upward interest rate bias, going from global to local, and stock pickers being back in style. With all the dire headlines, it’s easy to forget that we are in the midst of the fourth longest expansion on record. Looming risks exist, namely the prospect of trade wars, rising debt and deficit and other geopolitical threats, but broadly speaking, this expansion environment is positive for equities and other risk assets.
History has typically played out such that the president and at least one of the houses of Congress are of different political parties. President-elect Trump, however, will benefit from a “unified government,” which has been an important driver of overall post-election market reactions. With a clean political party sweep, much of what Trump campaigned on will at the very least make it to the bargaining table. What will be the likely impact of a Trump administration on current regulations and legislation, and the potential implications for capital markets?
Everyone agrees that a written investment plan is a good idea, yet according to recent FOX surveys only 40% of families utilize a written plan. Why are investment policy statements (IPS) avoided by so many families? What are the component parts of an effective IPS? What does a traditional IPS look like versus a modern iteration? What can families do to make the documents integral to the investment process? What are the IPS best practices?