2017 Investment Forecasts: Possibly good, no longer great

[...] after such a strong and long gallop upward, markets have many reasons to slow down, analysts and fund managers say.

[...] even though big, unexpected events repeatedly shook markets, from the U.K. decision to quit the European Union to Donald Trump's victory last month, stocks still managed to turn in a better-than-expected year.

In recent years, stock prices have risen far more quickly than earnings, and that has many investors expecting slower gains ahead.

When the financial crisis was still burning in early 2009, the S&P 500 index was trading at the cheap level of eight times its earnings per share from the prior 12 months.

[...] while a proposed corporate tax cut by Trump would provide an immediate boost to earnings, strong economic growth has so far remained elusive.

Where many analysts are more optimistic is in corners of the stock market that would benefit most from Trump's proposals for lower taxes, less regulation and a stronger dollar.

Following Trump's victory, interest rates began jumping on expectations for faster economic growth and inflation, and the yield on the 10-year Treasury note topped 2.60 percent this month, up from 1.86 percent on election day.

Rising rates mean newly issued bonds pay more in interest, but they also push down prices of bonds already in mutual funds and investors' portfolios.

"Bottom line, in a rising-rate environment, things will be very choppy," says Bernie Williams, chief investment officer for USAA's Wealth Management Investment Solutions.