The past couple years have been exceedingly easy for investors.
It may not seem that way to traders who have battled on the front lines through rough patches and geopolitical scares, but Morgan Stanley says that once people have the benefit of hindsight, they’ll realize just how perfect conditions were.
Let’s take an inventory of all the positive forces that support this view: stronger-than-expected economic growth, surprisingly weak inflation, continued monetary accommodation, and positive policy action (in this case, the new tax law).
As Andrew Sheets, Morgan Stanley’s chief cross-asset strategist, puts it, “one doesn’t usually get all of those things together, and their confluence powered risk assets higher.”
But, unfortunately for investors, the firm also says those easy gains are all but over.