Asset Allocation for January 2017

As expected FED hiked US interest rate from 0.5% to 0.75% in December. At the same time Janet Yellen stated to be ready for triple rate hike during 2017.

Investors ignored the risk of money rates increasing in US from 0.75% to 1.25/1.50 percent during 2017 year. Moreover, they pushed up their investments in risky assets to yearly maximum. SENTIX investors’ confidence index has grown to historical high – traders bet on challenging US President elected Donald Trump’s future policy.

Gold and REIT funds value showed decline in December. Those assets are extremely depended on interest rates and inflation level. Grains and oil were under pressure as well over dollar growth versus other hard currencies.

At the start of 2017 we do not expect sharp growth or bear market on the financial markets. Among significant events in January investors should focus on Donald Trump inauguration and corporate earnings season.

Threat and challenges in world markets:
- Monetary policy tightening by US FED
- Cold “cyber” war between Russia and USA
- Systematic economy crisis China
- BREXIT aftermath – EU disruption and political crisis.

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