Unsurprisingly, the market has been quite choppy of late. Overall the economy looks decent, but not great.
- China looks strong, but there is always the major hidden risk of a credit bubble there.
- Europe continues to improve, but 2017 is a year of significant political risk.
- In the United States, economic data has been mixed as lower taxes and healthcare reform seem to be further out in time than many had anticipated, contrasted with improved business and consumer confidence.
- The North Korea situation is worrisome due to the fact that they possess nuclear weapons and are located close to key allies such as South Korea and Japan.
Truthfully, just about every year I can remember has been filled with a mix of geopolitical and economic concerns. This is nothing new and I don’t view any of these developments as being worth of truly dictating investment decisions. The most important factor to producing strong investment returns are valuations, and lately with a slight increase in volatility, valuations on some key opportunities have become more attractive.