2017 – a good year

At the beginning of the year 2017 we wrote that all elements were reunited for a progressive acceleration of worldwide growth. This acceleration was confirmed and allowed equity markets to poste positive returns during the whole year. The French and Dutch election results were considered positive and helped the appreciation of the Euro. Looking at bonds, despite the progression and synchronisation of worldwide growth, interest rates remained stable thanks to the policies of central banks but also thanks to the low risk of inflation.

The year 2018 is likely to be more volatile as we progress in the economic cycle and the monetary policies are in a phase of normalisation. With regards to equity, all other points remaining the same, their level of valuation still shows potential for rise as companies benefit from a favourable economic environment. We need however to watch out of upside exaggeration (euphoria) and will favour asset allocation towards defensive investments, both on the equity side as the fixed income side.