The Intelligent Investor Newsletter – October 18, 2016


A bi-weekly publication from Consultiva Internacional, Inc. (Registered Investment Adviser)

According to the International Monetary Fund’s 2016 revised outlook, global growth is projected to slow to 3.1 percent this year before recovering to 3.4 percent in 2017. The forecast, revised down by 0.1 percentage point for 2016 and 2017 relative to April, reflects a more subdued outlook for advanced economies following the June U.K. vote in favor of leaving the European Union (Brexit) and weaker-than-expected growth in the United States. These developments have put further downward pressure on global interest rates, as monetary policy is now expected to remain accommodative for longer. This somewhat explains the Federal Reserve’s continued resistance to raising the federal funds rate, even though the U.S. economy has been on a seven-year growth trajectory as seen in our previous newsletter through raising leading and coincident indicators. In her recent remarks at the IMF-World Bank Annual Meetings Plenary, IMF managing director Christine Lagarde said that “advanced economies remain stuck in a low-growth, low-investment, low-inflation cycle. And while growth in emerging markets is picking up, low-income commodity exporters are struggling with low prices”. For Lagarde the challenge is not just increasing economic growth, but that improvements worldwide are shared by all, what she calls inclusive growth; “We need growth—but we need inclusive growth. We need to transition to the digital age— but a transition that benefits everyone. And we need to accelerate now.” Lagarde challenges leaders to think about three potential solutions to local economies; increasing equal opportunity for women and for workers in need of retraining, sharing the economic public burden in proportion to resources, and preserving fair competition and access to market for all. How inclusive is economic progress in your backyard?

by Myrna Rivera, CIMA®
Founder & Chief Executive Officer




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