The main risks to our view are that the politicians' continue to focus on the fringes rather than the majority and do nothing to promote economic growth and prosperity; the Fed overreacts to near-term growth and raise rates too soon although a quarter percent increase from this level really won't affect the economy much but may impact investor sentiment near term; Germany continues to disempower other nations in the Eurozone; OPEC does not come to an agreement next month to curb production and oil prices break by $10 or more per barrel destabilizing markets; terrorism escalates impacting economic growth; Russia does not stand down in Ukraine; and then, of course, there is the unknown.
The bottom line is that the global economies are improving including in the Eurozone, which continues to be a positive surprise after the Brexit vote. Low interest rates plus accelerating earnings is a good combination for the financial markets. Remember that this is a market of stocks so selection is key to outperformance. Maintain excess liquidity at all times to be in position to take advantage of unforeseen events and market declines.
Remember to review the facts, pause to reflect on mindset shifts while controlling risk and maintain excess liquidity at all times. Do independent fundamental research and...
Invest Accordingly
William A. Ehrman is managing partner at Paix et Prosperite LLC.