A Look Back at a Look Ahead

A year ago, Nuveen’s Bob Doll predicted that 2017 would be a “year of transition,” and – something that seemed far-fetched to most at the time – that the GOP would not only keep the House, but also the Senate – and capture the White House. How did the rest of his predictions for 2017 pan out?

Past performance may not be an indicator of future prospects, and predicting the future is an undertaking fraught with hazard. Here’s what Nuveen’s Bob Doll predicted a year ago – and how those predictions turned out.

Here’s what he also got “right,” according to his self-assessment:

  • Unemployment drops to its lowest level in 17 years as wages increase at the fastest pace since the Great Recession.
  • Financials, health care and information technology sectors outperform energy, utilities and materials.
  • Active managers’ performance improves as flows into equities rise.
  • Nationalist and protectionist trends rise as pro-domestic policies are pursued globally.
  • Initial optimism about the Trump agenda fades in light of slow legislative progress.

Here’s what he claims to have gotten “half correct”:

  • U.S. and global economic growth would improve modestly as the dollar strengthens and reaches parity with the euro.
  • Treasury yields move higher for a third consecutive year for the first time in 36 years as the Fed raises rates at least twice.
  • Stocks outperform bonds for the sixth year in a row for the first time in 20 years while volatility rises.
  • Small caps, cyclical sectors and value styles beat large caps, defensive and growth areas.

As for “wrong,” that’s:

  • Stocks hit their 2017 highs in the first half of the year as earnings rise but price/earnings multiples fall.

So, Doll credits himself with getting a “7” out of “10.”

It will be interesting to see what happens in 2018.

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