Not much seems to be expected of the world economy for 2016. Looking around the industry's end of year outlook documents, the most prevalent view is 'more of the same' – inflation is set to remain largely absent around the world and output growth meagre, with likely risks to the downside.
The political backdrop will be a source of rising consternation while rising US interest rates, amidst durably higher capital markets volatility, will further crimp investor returns as valuations suffer.
However, our advice remains to keep an open mind - there is still as much, if not more, cause for optimism as there is for pessimism. The fact that the US has just endured its worst decade of growth in over 50 years may well make it more likely that the next decade sees faster growth.
As we head into 2016, the European economic recovery is looking more assured, while China's ongoing rebalancing has regained some poise and the US consumer still looks perfectly capable of shouldering much of the burden for the world's economic prospects.
All of this, set alongside those subdued expectations for global growth and inflation, suggest there is still mileage left in this business cycle for equity investors. On the other hand, even if inflationary pressures remain benign as widely expected, fixed income investors will likely have to work very hard to make positive real returns over the next couple of years from current levels.
Saddam Hussein was on trial and we didn't have iPhones the last time the Federal Reserve raised interest rates. Since then global per capita output is up by nearly a quarter, while the US stock and bond markets have returned 70 and 38 per cent respectively.
In the developed world, the consumers have meaningfully less financial leverage, but productivity growth has slowed markedly (though there remains some debate as to how heavily we can lean on productivity statistics).
The debate about whether the Federal Reserve was right to make this move with inflation still below target on their preferred measure will no doubt remain a subject of heated debate for a while yet . The central bankers have of course continued to assure us that the pace of interest rate rises will be gradual over the coming years.
However, we should be sceptical of reassurances that are based on a view of the future that of course lacks crucial information. As the British Prime Minister, Harold Macmillan, was purported to reply to a question about what was most difficult about his job – 'Events, dear boy, events.'
Nonetheless, even if interest rates do have to rise a little faster than the market currently expects, we suspect the economy can handle it. If we assume that trend nominal growth represents in some way the economy's ability to service its debt payments, then there remains significant headroom for nominal interest rates to rise over the coming years.
2015 has been a tough year for investors, particularly those based in dollars. As we look into 2016, the traditional hiding places for investors, particularly the high quality government and corporate bond space, continue to look very expensive. The shelter that these areas of the market offer may prove illusory if any inflation does return a little more forcefully than currently expected.
For equities, valuations look unremarkable and earnings growth expectations achievable. Those more strategically minded investors will sense an opportunity in emerging markets equities where sentiment and outflows may be in the process of bottoming.
For our part, we remain tactically underweight, but see significant long term attraction in Korea, Taiwan and Chinese equities (MSCI China). More generally, we would do well to remember that while economic and market forecasts often (understandably) lean very heavily on the recent past for inspiration, the future is not so easily or accurately described.
:: Jonathan Dobbin is head of wealth and investment management NI at Barclays. He can be contacted on 028 9088 2925 or email jonathan.dobbin@ barclays.com
