With the first quarter of 2017 already underway, the global investment industry is buzzing about the hottest trends of interest to savvy investors. The recent election and widespread global economic changes have ushered in a new reality for the global economy that remains to be fully realized.
In a recent interview, portfolio manager Tim Armour explained that interest rates are of universal interest because the Federal Reserve has raised rates for the second time within a year. In addition, corporate growth within the U.S. is on every investor's mind right now because it is generally assumed to be the strongest indicator of overall U.S. economic growth.
The general consensus is that economic growth in Europe has been notably slow in recent years and is only recently showing signs of potentially picking up on the whole. However, some individual European companies that are thought to add value in a broad range of markets have broken ahead of the pack and may present strong investment opportunities for experienced global investors. This means that having insight into individual companies that seem to be bucking overall trends can serve a proactive investor very well in the coming months.
The historic election of President Donald J. Trump and the vote by the U.K. to leave the European Union have illuminated a populist sentiment across the globe that is weary of globalization. Investors should be on the lookout for more barriers to global trade. There are expected to be more bilateral trade agreements as opposed to regional alliances. Industries that rely on global distribution and migration will be most directly affected by this trend.
There will continue to be increased demand for digitization and automation as companies embrace the digital era. Self-driving cars are widely expected to revolutionize the auto industry. We are bound to see the incorporation of artificial intelligence in more products and services. Along with these advancements, businesses will be required to take more comprehensive steps to improve data security as cyber crime becomes a more apparent risk. Data storage solutions are also expected to become more necessary to a broader range of businesses.
Finally, there is a significant risk of inflation as we expect broad corporate tax cuts in the U.S. The new administration is also keen on infrastructure spending, which could be a boon to the U.S. economy. This means that individual spending is expected to increase along with overall investment activity.