Investing in 2018: Mind Inflation, Show Caution

2017 was a better year than expected for investors - but what will 2018 deliver for shareholders of US equities?

Russel Kinnel 10 January, 2018 | 1:00PM

Outgoing Fed Chairman Janet Yellen

2017 was a better year for investing than I had expected. Emerging markets were the best place to be. The average India fund gained 47%, the average China fund was up 42%, and diversified emerging markets were up 34%. And the United States was no slouch, with gains of 21%.

The two takeaways from the 2017 rally are: 1) You can’t afford to be out of the market. It is tempting to market-time, but rallies are unpredictable, so stick with your plan no matter what the headlines say. 2) There are no screaming bargains left out there. Low interest rates and economic growth have pushed investors around the world to keep buying stocks, bonds, and any other financial asset.

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About Author

Russel Kinnel  is Morningstar's director of fund research. He is also the editor of Morningstar FundInvestor, a monthly newsletter dedicated to helping US investors build winning portfolios.

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