# What to expect from markets in 2018 – Colin McLean, SVM Asset Management Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-12-14 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Investors Beware! Colin McLean Warns of Profit Warnings and Meta Description: Discover insights from Colin McLean, SVM Asset Management, on persisting themes like business disruption and economic stimulus in 2018. Prepare for potential URL: https://financedigest.com/what-to-expect-from-markets-in-2018-colin-mclean-svm-asset-managementhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/fd141217-1-1736843156806-compressed.jpg) _Comment from Colin McLean, managing director, SVM Asset Management_ - Themes of business disruption and economic stimulus likely to persist - Investors could see more profit warnings in retail and finance - Until real wages start to grow, [expect governments to continue with stimulative](https://www.financedigest.com/bone-growth-stimulators-market-is-expected-to-earn-a-valuation-of-us-2-1-bn-by-2027.html "Bone Growth Stimulators Market is Expected to Earn a Valuation of ~US$ 2.1 Bn by 2027") policies - New regulations on stockbroking commissions may make the [stock market](https://www.financedigest.com/bitcoin-falls-to-22-month-low-as-stock-markets-tumble.html "Bitcoin falls to 22-month low as stock markets tumble") less efficient Inflation and [rising interest rates tend to help banks](https://www.financedigest.com/bank-of-england-set-for-second-hefty-rate-rise-in-a-row.html "Bank of England set for second hefty rate rise in a row"), industrials and mining businesses, and hit prospects for growth businesses. But, if inflation remains low, it could be another good year for growth in the global economy, continuing the performance of growth [stocks](https://www.financedigest.com/mutual-funds-vs-stocks-which-is-better.html "stocks"). Stock picking in 2018 may be nuanced, as it has this year, with individual company [prospects the key](https://www.financedigest.com/home-furniture-market-industry-outlook-growth-prospects-and-key-opportunities.html "Home Furniture Market: Industry Outlook, Growth Prospects and Key Opportunities"). Themes likely to persist are business disruption and economic stimulus. There’s no slow-down in the arrival of new business models, particularly in retail and finance – both under threat from new mobile [online services](https://www.financedigest.com/tesco-says-online-services-back-up-after-interference-attempt.html "Tesco says online services back up after interference ‘attempt’"). There have been some nasty surprises in these sectors in 2017, and the pattern of [profit warnings](https://www.financedigest.com/wh-smith-warns-on-2022-profit-due-to-slow-travel-recovery.html "WH Smith warns on 2022 profit due to slow travel recovery") could continue. New businesses need little capital to expand and are readily scalable, tackling cosy sectors with fat margins but poor [customer value](https://www.financedigest.com/cracking-the-code-of-customers-future-value-in-retail.html "Cracking the code of customers’ future value in retail"). The [winning disruptors are typically valued at a premium](https://www.financedigest.com/premium-bicycles-win-new-fans-among-chinas-city-folk.html "Premium bicycles win new fans among China’s city folk") rating, reflecting their strong growth and cash flows. Nimble investors can avoid declining sectors. Rising interest rates may not [tell the whole story about the global](https://www.financedigest.com/be-simple-in-bank-capital-bank-of-england-tells-global-regulators.html "Be simple in bank capital, Bank of England tells global regulators") economy. It looks like [central banks](https://www.financedigest.com/central-banks-ease-off-on-rate-hike-push-in-october.html "Central banks ease off on rate hike push in October") want to slow economic expansion, but there is little sign of real overheating, even at near full employment. This may have something to do with poor [productivity growth](https://www.financedigest.com/dry-molasses-products-market-overview-in-depth-analysis-of-market-size-growth-industry-overview-2022-2029-2.html "Dry Molasses Products Market Overview In-depth Analysis of Market Size, Growth, Industry Overview 2022-2029"), technology and the gig economy, but it’s a persistent pattern across the Western world. Until real wages start to grow, governments are likely to continue with stimulative policies. Rising interest rates may run alongside policies to [boost growth](https://www.financedigest.com/predisposition-biomarkers-market-future-trends-segmentation-strategies-to-boost-growth-applications-with-covid-19-impact-till-2028.html "Predisposition Biomarkers Market Future Trends, Segmentation, Strategies to Boost Growth, Applications with Covid-19 Impact till 2028"). Disinflation has not been conquered globally, and bad businesses can’t [expect an inflation](https://www.financedigest.com/u-s-consumers-inflation-expectations-highest-in-8-years-ny-fed-says.html "U.S. consumers’ inflation expectations highest in 8 years, NY Fed says") bail-out. The year will start with the new [European regulations on stockbroking commissions](https://www.financedigest.com/ftx-collapse-shows-urgent-need-to-finalise-eu-crypto-rules-says-european-commission.html "FTX collapse shows urgent need to finalise EU crypto rules, says European Commission"), which could disrupt research. [Investors should see](https://www.financedigest.com/oil-gains-as-investors-see-limited-omicron-impact-on-demand.html "Oil gains as investors see limited Omicron impact on demand") lower commission charges, but the need to pay for stockbroking research in hard cash will be a revolution. It will herald big cuts in employment in the [stock market divisions of investment](https://www.financedigest.com/how-to-start-investing-in-stock-market.html "How to start investing in stock market") banks, and is likely to shrink the availability of company research. This may make the stock market less efficient, with [share prices](https://www.financedigest.com/siemens-ceo-watching-the-share-price-of-siemens-energy-ceo.html "Siemens CEO watching the share price of Siemens Energy – CEO") becoming more volatile and possibly more frequently out of line with fundamentals. Investing institutions will beef up their own internal research teams to take advantage of this. Mispricing of shares – particularly in smaller and medium-sized companies – is likely to [create greater opportunity for performance and reward for investors](https://www.financedigest.com/could-the-surging-build-to-rent-market-create-emerging-opportunities-for-investors.html "Could the surging build-to-rent market create emerging opportunities for investors?") who have the skill to evaluate company prospects. In contrast, it may become a riskier world for index funds. Passive investing relies on research by others to get share prices “right”, but [next year](https://www.financedigest.com/musk-says-tesla-will-launch-prototype-of-humanoid-robot-next-year.html "Musk says Tesla will launch prototype of humanoid robot next year") that free ride will bring new risks. Those who use index and exchange-traded funds will still enjoy lower [investment costs](https://www.financedigest.com/the-hidden-costs-of-property-investment.html "The Hidden Costs of Property Investment"), but they can be less certain that others are doing the work of getting share prices in line with prospects. Active fund [managers will conduct more research](https://www.financedigest.com/new-research-suggests-over-13-million-brits-were-inadequately-managed-while-working-remotely-2.html "NEW RESEARCH SUGGESTS OVER 13 MILLION BRITS WERE INADEQUATELY MANAGED WHILE WORKING REMOTELY*") themselves, and may be able to manage this risk. This economic cycle is proving unusually long, as is the bull stock market. But [market patterns can persist while politicians are focused on growth](https://www.financedigest.com/recent-research-high-power-industrial-burners-market-to-witness-steady-growth-at-4-1-cagr-by-2021-to-2031-persistence-market-research.html "Recent Research: High Power Industrial Burners Market To Witness Steady Growth At 4.1% CAGR By 2021 to 2031: Persistence Market Research"). Rather than making wholesale change to portfolios, [investors should take the opportunity for risk management](https://www.financedigest.com/activist-investor-elliott-management-takes-stake-in-salesforce-sources.html "Activist investor Elliott Management takes stake in Salesforce -sources"). Start by considering whether any [growth shares](https://www.financedigest.com/outside-door-handle-market-analysis-trends-top-manufacturers-share-growth-statistics-opportunities-and-forecast-to-2027.html "Outside Door Handle Market Analysis, Trends, Top Manufacturers, Share, Growth, Statistics, Opportunities and Forecast to 2027") are now too highly rated, and look for signs of disruption changing business prospects. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---