2018 is likely to be an unusual year for markets. So far in 2017, the MSCI world index is up some 18% and stands on a P/E of just over 21x. We are now in the 9th year of the bull run since the trough of 2008. By all traditional measures, market participants would expect a correction at some stage, and the question would be whether it would be what we in Hermes term a black bear (traditionally the less aggressive of the species) of circa 25% as in 1957, 1962, and in 1978; a brown bear (the more aggressive of the species) of circa 45% as in 1973, 2001 and 2008 or a mere correction of anywhere between 5% and 17% as in 1956, 60, 66, 77, 81, 90, 2008 and 2011.
Please see below for a collection of 2018 outlooks from Hermes Investment Management’s senior executives, investment office as well as equity, fixed income, private markets and stewardship teams.