HOUSE_OVERSIGHT_014525

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From: Morris, Paul V 
Sent: 1/5/2017 3:31:54 PM 
To: Morris, Paul V 
CC: Lehane, Sean T 
Subject: The Year Ahead: A World of Change (Short Version Below For Convenience) 
Attachments: image001.jpg; image003.jpg; image004.jpg; image005.png; image006.jpg 
The Year Ahead: A World of Change 
A continued rise in equities. Renewed investor confidence. Bond markets under 
pressure. Our Chief Investment Office explores the risks and opportunities of 
these and other trends shaping the year ahead. 
AS WE 
LOOK 
BACK ON 
2016, one 
could 
characterize 
it as The 
Year of The 
Unlikely. It began with deep worries regarding China's growth path, a second wave of collapsing 
oil prices, a Federal Reserve (Fed) hiking into deflationary headwinds, the impact of negative 
interest rates in Europe and Japan, concerns over a potential U.S. recession, lower-quality corporate 
HOUSE OVERSIGHT 014525 
high yield problems, and U.S. consumers who might never spend their savings at the pump. All 
these worries hit at once in January and February, prompting the S&P 500 to fall over 10% from its 
2015 closing level of 2043. The year, at that point, appeared bleak. 
Our view was to maintain a balanced and diversified position throughout the downturn, particularly 
for the long haul, due to our belief that the major concerns, although understandable, were simply 
not going to fully develop and asset prices would begin to track fundamentals more effectively 
through the remainder of the year. The potential for risk assets to climb higher was there but a 
catalyst was needed. For our full view on the year ahead, please read our December 2016 Monthly  
Letter.  
Exhibit 1: Mid-Cycle Slowdown Ended In Early 2016, 
When Oil and Dollar Stabilized) 
120 
Spot 01 Price: West Texas Incernwdlate 
_.(6-Alowth Moving erage. Left Scale! 
e 60— . 
40 _____ 
Rea Broad Trade-Weighted Eachawr 
Value of theuss 
20 46-14ontre Moving Average Right SCale 
Illy0eSiouidown 
...........................................

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