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Matthias Knab, Opalesque:

AB (AllianceBernstein L.P.) writes on Harvest Exchange:

Global equities enjoyed a strong start in 2017, driven by optimism about economic growth in the US and Europe. But political risk and valuation concerns undermined confidence toward quarter-end, highlighting a key dilemma facing investors this year.

Investor sentiment is being pulled in two directions. Will macroeconomic growth pull stocks up this year - or will political risk pull them down? This question was evident in the US, as stocks plateaued in late March after the government failed to pass a bill to repeal Obamacare. The move resulted from tensions within the Republican Party and dampened some enthusiasm about President Trump's plans for tax cuts and fiscal stimulus, which had energized the market since the US election.

We believe that there are good reasons to stick with equities for the long term. And in the current environment, it's especially important for investors to , as valuations and growth profiles differ from region to region.

EMERGING-MARKET AND GROWTH STOCKS REBOUND

During the first quarter, the MSCI World Index advanced by 5.4% in local-currency terms ( Display, left ). US large-cap stocks did well, though the rally in US small-caps that had been prompted by the election in November stalled. Emerging markets......................

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