2018 has proven to be a very challenging year for financial markets. This is summed up by today’s chart, created by Deutsche Bank, which shows that in US Dollars terms, 93% of the asset classes it follows are down for the year. Basically, the only asset class that is up is USD cash, while US Treasuries are flat. From a European perspective, things are slightly less downbeat, as foreign currencies have on average strengthened against the euro. But, here, too most returns are negative. For some asset classes, like high yield, a difficult year was to be expected, but for others, such as non-US equities, the recent hit is more difficult to explain. Equities are about to record their third worst(!) quarter in 30 years with only Q3 2002 (burst of the dot-com bubble) and Q4 2008 (start of the Great Financial Crisis) seeing bigger losses. While the reduction in global liquidity by central banks was always expected to cause market turmoil, the circumstances under which it is happening − reasonable GDP growth, strong company earnings, low unemployment and rising wages − could be considerably worse. Equity markets are now pricing in a recession, albeit a shallow one, even though it’s still far from certain if it will happen anytime soon. So, next year could offer a valuable entry point for equity investors going forward. For now, I wish you very happy holidays and all the best for the year to come.