2017 was yet another great year for stock markets, not that most investors seem to have noticed.
The mood has been downbeat, as it has been throughout the post-financial crisis recovery, which I have previously called the bull run nobody loved.
The euphoria that marked the 1980s and 1990s has been markedly absent, as if investors have been so traumatised by the events of 2008 they no longer dare enjoy themselves.
Investors are no fools, they know asset prices have been propped up by central banker stimulus, and fear what will happen when they turn off the fiscal and monetary life support.
The process is now underway, at least in the US, where the Federal Reserve has hiked interest rates three times this year, while even the Bank of England hiked in November and found that the world did not end after all.
Up, up, up
If you find it hard to believe 2017 was such a good year, take a look at the figures.
At time of writing, Europe has posted supremely healthy stock market growth of 19.72% year-to-date, according to MSCI.
It was closely followed by the US at 18.52%, while even the Brexit-plagued UK rose 12.85%.
Emerging markets came storming back into form, rising 30.3% according to MSCI, with China blazing a trail at 48.13% and Argentina the global winner up 73.1%.
Worst performer was crisis-stricken Venezuela, its market plunging more than 95%, but your clients are unlikely to have money there.
Markets up, sentiment down
2017 was the year global markets faced down President Donald Trump, North Korean, Middle East tensions, populist movements in Europe and interminable Brexit wrangling, yet private investors cannot bring themselves to celebrate.
Incredibly, investor confidence actually sank to a record low in 2017, according to Hargreaves Lansdown, below even 2008, when the banking crisis knocked 40% off share prices.
This was despite the FTSE 100 repeatedly hitting record highs in 2017, while investment funds saw record inflows. Doesn’t anybody know how to enjoy themselves anymore?
Roll on 2018
Stock markets are a great way of building personal wealth and in 2017 they delivered the goods once again, whether people noticed it or not.
Individual investors may not be aware of that fact, but IFAs will be keen to enlighten them at their annual portfolio review.
Clients will need to be positive as we head into what will be a tortuous 2018, with Brexit, Trump, North Korea, Iran, Putin and the rest of the rogues gallery to deal with all over again.
The new year will bring new threats – resurgent inflation is one to watch – but as 2017 showed, markets are tougher than they look. If only investors noticed.