Investor optimism has taken off after the 2016 U.S. presidential election. Despite this enthusiasm, many facts today - including valuations, federal deficit spending, corporate debt and other factors - demand caution. As Howard Marks says, "We may never know where we're going, or when the tide will turn, but we better have a good idea where we are." Where we are today isn't pretty.
The U.S. presidential election triggered a psychological shift in investors' mindset. Change is often cause for enthusiasm and at the close of 2016, U.S. equities raced to new highs. Despite the run-up, however, there remain numerous reasons why investors need to remain cautious and it has little to do with politics or who sits in the Oval Office.
1. Bull markets don't last forever: In July, the economic recovery will be 8 years old; the longest recovery in U.S. history was 10 years. Could this current…
