HOUSE_OVERSIGHT_014612.jpg

2017 OUTLOOK In Closing WE DO NOT BELIEVE THE COMING YEAR WILL BRING AN END to the prolonged run of positive performance for either the US economy or the bull market for equities. Despite greater uncertainties, including those tied to a new US administration, the policy backdrop in the US will likely prove particularly favorable for the economy, with looser fiscal policy, still easy monetary policy and a lighter regulatory burden. As these factors diminish the probability of recession in 2017, they also support the case for clients remaining invested in global equities at their strategic allocation. We believe US equity gains are likely to be modest but still more attractive than the comparable returns of investment alternatives such as cash and bonds. And, as last year demonstrated, US equities often surprise to the upside. While we see the glass as half-full, there is no shortage of risks—some of which have high probability and uncertain impact for the year ahead—that could cause our forecasts for the economy and asset class returns to miss the mark. As always, we will adjust and communicate our views accordingly should the economic, financial or geopolitical backdrop change materially over the course of 2017. Outlook | Investment Strategy Group 79 HOUSE_OVERSIGHT_014612