Each July, adrenaline junkies from around the world converge in Pamplona, Spain for the Fiesta de San Fermin—the highlight of which is the running of the bulls. These controversial and, at times, dangerous races pit the bravery, dexterity, and wits of the runners against the momentum of the crowd and the speed of the bulls. This scenario is very similar to what we’re anticipating will play out in the markets this year. The skills, experience, and smarts of investors are going to be challenged by the momentum of the markets, which is why we’ve called our 2018 Global Market Outlook “Running with the bulls.”

We are currently in the second-longest running bull market on record, and several market forces are already conspiring to fulfill the prophecy that bull markets typically die in euphoria, or are killed by a policy mistake. This paper discusses what we’re doing to manage these impending shifts in our portfolios.

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