Many investors were unsettled by the development of markets in January. And they should brace themselves for repeated phases of turbulence in the rest of the year as well. On balance, however, Till Budelmann, Chief Investment Officer of the Swiss private bank Bergos, is rather optimistic, believing that equity prices will close the year at a higher level than today. This expectation is based on the following considerations: The global economy is growing at least at the trend rate, corporate earnings growth is positive, investor sentiment as a contrarian indicator is rather pessimistic, and there is still no alternative to equities as a source of return. He still prefers the US equity market despite its recent relative weakness. Extremely short durations in US bonds can protect against the steep losses that could result from a further rise in yields.(…)