David Rosenberg: The last year of the cycle

2018 is starting to look a lot like 1988, 1999 and 2006, reckons investment guru David Rosenberg. Investors should make the most of the next 12 months.

As we enter 2018, the "backdrop is eerily similar to 1988, 1999 and 2006", warns David Rosenberg, chief economist and strategist at Canadian money manager Gluskin Sheff. "And what we know about each of those years is that the one that followed was the last of the cycle." In short, investors should enjoy the next 12 months, because this bull market and economic expansion is on its last legs.

"I am far from advocating that anyone head for the hills or move totally into cash just yet," Rosenberg cautions. But it's time to invest more defensively. So "focus on companies with strong balance sheets" and "low refinancing risks". Look for "earnings quality and predictability", and don't be surprised if long-term bond yields "go even lower" than they are today. One problem is that stocks particularly in the US are pricing in "very little in the way of anything possibly going wrong".

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