The implications of the US economy moving into a period of stronger growth, faster inflation and rising rates shouldn’t be overlooked. And neither should the newest addition to the portfolio, an addition whose business goes from headwind to tailwind in this new environment.
This year will be a good year US equity investors, but only if you take an active approach. In that vein, we’re booking profits on one portfolio member and cutting another to hold–protecting profits as sentiment and growth shifts.
Overseas investors must pay attention to the way proposed US trade policies will affect emerging markets. And within the ones best protected, Indian small caps are our favorite, especially as domestic reform turbulence subsides.
The big story for energy markets in the first half of 2017 will be a stronger-than-expected surge in US shale oil production that keeps the lid on global oil prices. To take advantage, we’re adding a midstream processing and pipeline company to the portfolio.
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