Top Picks 2018: MSCI All Country World Index ETF (ACWI)

01/23/2018 5:00 am EST

Focus: ETFS

Matthew Kerkhoff

Editor, Dow Theory Letters

One of the most important things to understand about this current bull market is that it is international in scope, explains Matt Kerkhoff, editor of Dow Theory Letters.

This is not a U.S. story; it’s a global one — so regardless of what happens here in the States, the global economic backdrop remains healthy and positive.

Over the last couple of years, we’ve seen the global economy pull back from the deflationary abyss, and begin a new cyclical upturn. Interest rates are finally beginning to rise and central banks are beginning to walk back their hyper-accommodative monetary policies.

We’re still in the early phases of this, to be sure, but this is a powerful signal that suggests a global recovery is in the works.

2018 is projected to see the fewest countries in recession ever, and that bodes very well for the global outlook. Whenever one country’s economy is doing well, their trading partners tend to benefit.

As more and more countries enter a sustained period of economic expansion, it leads to the creation of a virtuous cycle that tends to lift asset prices across the board.

Not only are most economies around the world in relatively good shape, leading economic indicators for just about all countries are also pointing up. This means that we’re likely to see continued improvement during 2018, which will grow the economic pie larger for everyone.

As a result, we believe that a position in the MSCI All Country World Index ETF (ACWI) will do very well during 2018.

Diversifying your investments across many countries will allow you to participate in the global economic recovery while not being exposed to too much risk within one particular country or market.

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