Navegó a una página que no está disponible en español en este momento. Seleccione el enlace si desea ver otro contenido en español.Página principal
Weekly market insights from the Global Investment Strategy Team
What it may mean for investors
2017 Outlook—Seeing Things Differently
It's not what you look at that matters, it's what you see.
-Henry David Thoreau
2016 was punctuated by several short bursts of volatility and quick reversals. Early in the year, global financial and commodity markets pulled back on worries about four potential Federal Reserve (Fed) rate hikes and China's potential economic weakness. In the end, these concerns failed to materialize, as caution in Washington and Beijing promoted stability. Midyear, the "Brexit" vote shocked global markets, but investors soon realized that any repercussions were likely months, if not years, away. Finally, the U.S. election drama captivated investors to the very end. If investors were looking solely at these events, they would not have seen what was quietly happening in the background—nearly all asset classes were moving higher, some significantly so. A year like 2016 reminds us that seeing beyond the day-to-day volatility matters when it comes to investment performance.
As we head into 2017, we are looking at the continuation of many trends, but we are starting to see things a little differently.
Five shifts that we believe warrant investors' attention.
With these five shifts as a foundation, we advise investors to consider the following as they chart a course for 2017:
Equity valuations may not advance broadly next year; thus, equity gains could be more limited and harder to capture in index-replicating strategies. Selectivity may become more important. We believe that investors will need to be more selective and active within their equity portfolio.
The potential for inflationary surprises and geopolitical stresses leads our tactical guidance toward a more conservative emphasis—a change from the past seven years. In particular, we suggest investing in higher-quality assets to help reduce the impact of volatility.
Though we do not foresee a U.S. recession in 2017, we are monitoring factors, such as household and corporate debt levels, that could contribute to the end of the current economic expansion. We advise investors to begin preparing by keeping a diversified portfolio that eschews taking more risk for higher yield, and rebalances more often.
As the economic cycle matures, qualified financially sophisticated investors also may want to consider increasing allocations to alternative investment strategies within their portfolios, such as hedge funds and private capital funds, which can present attractive opportunities.
We may continue to see unexpected outcomes in 2017. But, investors needn't be caught off guard by them. It is our view that the signs of change often are evident, and it is how we respond to those signs that matters. When making investment choices, we believe that investors should take a broad perspective, considering the complexity of the world and the speed at which change is taking place. We have titled our 2017 Outlook "Seeing Things Differently" because we want to kick off 2017 by encouraging investors to broaden their perspectives.
Equity investments are subject to market risk which means their value may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors. There is no guarantee that dividend-paying stocks will return more than the overall stock market. Dividends are not guaranteed and are subject to change or elimination.
Investing in commodities is not suitable for all investors. Exposure to the commodities markets may subject an investment to greater share price volatility than an investment in traditional equity or debt securities. Investments in commodities may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or factors affecting a particular industry or commodity. Products that invest in commodities may employ more complex strategies which may expose investors to additional risks.
Alternative investment strategies employ aggressive investment techniques, including short sales, leverage, swaps, futures contracts, options, forward contracts and other derivatives which can expose the investor to substantial risk. Strategies may, at times, be out of market favor for considerable periods with adverse consequences to the investor.
Global Investment Strategy is a division of Wells Fargo Investment Institute, Inc. (WFII). WFII is a registered investment adviser and wholly-owned subsidiary of Wells Fargo & Company and provides investment advice to Wells Fargo Bank, N.A., Wells Fargo Advisors and other Wells Fargo affiliates. Wells Fargo Bank, N.A. is a bank affiliate of Wells Fargo & Company.
The information in this report was prepared by the Global Investment Strategy division of WFII. Opinions represent GIS' opinion as of the date of this report and are for general information purposes only and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally. GIS does not undertake to advise you of any change in its opinions or the information contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.
This report is not intended to be a client‐specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon.
Wells Fargo Advisors is registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial services regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) with Wells Fargo Advisors may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of any investments, investment transactions or communications made with Wells Fargo Advisors.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company. CAR# 1216-01816