International
The global economy is expanding, but the growth rate remains sub-par. Euro zone technocrats, ever-willing to sacrifice proven capitalist economics, push for higher taxes and excessive regulations that enshrine bureaucracy. However, this swamps economic revitalization. Meanwhile, China's reform-minded leaders fight epic battles to make China more competitive and productive. Japan embarks on a very risky course of Quantitative Easing and excessive sales taxes without any real economic reforms. Latin America faces a raft of problems: low commodity prices, protective practices and a return of socialist programs.
Taiwan, Thailand, Singapore, Hong Kong and other Asian countries have strong current account surpluses, high literacy rates and growing productivity. We see opportunities in emerging markets that have been unduly punished in 2013 and are at bargain prices. The United Kingdom has surprised many, at least the social-democrats on the European continent, with stronger than expected growth and offers some opportunity. Ireland's low tax rates continue to pay off.
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Positives |
Negatives |
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Favor Taiwan, Thailand, Singapore, Hong Kong stock markets |
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Global growth hampered by austerity measures, high taxes, excessive regulations |
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Chinese stocks to prosper if Xi Jinping's reforms are implemented |
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Commodity prices still correcting, pressuring many Latin American stocks |
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Favor U.K. stocks |
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Japan's Quantitative Easing creates huge risks for the global economy – avoid |
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Some foreign markets have attractive earnings yield along with GDP growth |
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Euro zone recovery is very sluggish, hampering some emerging markets |
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Volatile African stocks show potential |
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Rising external financing costs slow emerging market growth |
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Economic Outlook
- Annual Outlook from Fund Advisor
- Provides recommendation for Investors
- Forecast for Economy, Bonds, Stocks and International
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