On Friday, we were stunned with the news that the Bank of Japan (BOJ) had cut interest rates to minus 0.1 per cent. This may not have affected your “everyday” world but it did affect ours, as your advisor, and it will affect you as an investor in the future. Following this stunning, and actually negative, economic news, the markets responded with one of the strongest, positive days that we have experienced since last September. Given the history of such events, this not surprising but it is antithetical. The BOJ cut rates because it became very concerned that the slowdown in world markets, particularly emerging markets, and slumping oil prices would hurt growth in Japan, following the recent announcement that gross domestic product growth in the US slowed sharply in Q4 2015 to an annualized rate of 0.7%. This compares to China’s projected growth rate for 2016 of 6.7%! So, while the concern up until now has focused on slowing growth in the emerging world, its shift to the more resilient economies is now concerning central bankers. We have real concerns that deflationary pressures – which can lead to recession-like conditions – are now emerging and that actions such as those of the BOJ could trigger so-called currency wars as monetary stimulus in Europe and Japan negatively impacts exporters in the US and elsewhere. So, we saw little to be positive about following Friday’s announcement. It truly signaled longer term economic weakness. So, when equity markets respond positively to declines in interest rates, or a reduced likelihood that interest rates will rise, they will eventually respond to the underlying reason that such a move in interest rates was designed to counter – meaning that they will eventually respond to the fact that all of this signals a difficult time ahead for the world’s economies. In the short run, equity markets can run counter to underlying economic growth, but they cannot achieve this over the long run. Our slowing world economy will mean that we will struggle to see more than low, single-digit returns for the next 12 to 18 months with increased volatility and surprises to the downside. And as we expected, the markets, absorbing this move by the BOJ more rationally, have largely reversed Friday’s gains. In this environment, what do we propose to do?