November 2017 Commentary

Several themes dominated the month of November as it relates to your investments with the ongoing debate around tax reform in the US and OPEC policy being the most relevant. The concept of tax reform has been analyzed to death, so we won’t spend a great deal of time on it here; however, we would be remiss if we didn’t point out that it’s yet another bullish data point, allowing the narrative of economic strength to continue and push stocks even higher. While we were admittedly too cautious regarding equities entering 2017, our current belief is that in spite of high valuations by historical standards and what appears to be widespread bullishness, markets should continue to grind higher in the absence of an exogenous shock, given the complete lack of worthwhile alternatives to equities and reasonable economic growth around the world. That said, we do not believe this is the appropriate time in the cycle to be making levered or aggressive bets on stocks. We believe that focusing on specific high-quality companies and sectors with tailwinds should yield outperformance.

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