It is the peril of today’s capital markets. Markets should be generally predictable. One should be able to rigorously apply fundamental and technical analysis in order to establish rational expectations for reasonable market outcomes over time. But such are not the markets in which we have been operating since the outbreak of the financial crisis nearly a decade ago. Instead, global capital markets have become increasingly burden by the capriciousness of human decision making by global policy makers and central bank leaders. And while the persistent generosity of these decision makers including their inability to deny the markets of any discomfort has certainly been a boon over the last several years, it may ultimately serve as an even greater detriment in the end. For while fundamentals and technicals are reasonably predictable over time, human decision making certainly is not, particularly when these once generous policy makers finally run out of options. As a result, investors should increasingly prepare to expect the unexpected as we continue through 2015 and beyond.
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