If you thought 2016 was tough, next year could present even greater challenges for investors. Here are the four things that could cause considerable volatility in the markets over the next 12 months.
1. The French go to the polls
If this year's seismic events have taught us anything, it's that a huge number of people are growing increasingly dissatisfied with the political elite. As such, investors will be approaching April's elections in France with a degree of trepidation. A victory for far right candidate Marine Le Pen would send shockwaves through Europe given her desire to hold a referendum on EU membership if elected. Equities -- particularly banking stocks -- would surely take a battering if France departed from the euro and the entire eurozone experiment could be living on borrowed time. All this before Germany's federal election in the autumn.
For these reasons, investors should probably be hoping for the Republican party's Francois Fillon to emerge triumphant.
2. Trump's push for growth
Trump's proposed cuts to tax and regulation may help boost growth and consumer demand in the US but his protectionist stance is likely to cause ripples around the world, not to mention bringing an end to the 30-year bond bull market. The latter is good news for those holding equities, particularly those of a cyclical nature; not so good for those whose wealth is tied up in less risky assets.
The fact that Trump's policies will also encourage inflation isn't necessarily a bad thing so long as it remains under control. Should inflation start to gallop ahead however, then central banks will have no option but to raise interest rates, perhaps aggressively. It's then that equities becomes less desirable and the markets become a scary place to be.
3. Countdown to Brexit
When you consider how little real progress appears to have been made over our EU exit since June, and given that employment and growth levels remain fairly stable, it's unsurprising if some investors are growing a little less nervous as to what 2017 will bring.
However, cracks are starting to appear and I would caution investors over becoming too relaxed. We've already witnessed a slowdown in the property market following the referendum. Mortgage rates have surely gone as low as they ever will and a raft of policy changes (including stamp duty hikes) are likely to impact on an already fragile market.
While Brexit is likely to dominate headlines throughout 2017, expect markets to be particularly sensitive in March -- the month that Theresa May plans to trigger Article 50.
4. China's debt mountain
The biggest threat to your wealth over the next year (and beyond), however, is quite possibly China. If you cast your mind back to August 2015 and January this year, you'll remember just how susceptible the rest of the world now is to sneezing when the second biggest economy catches a cold.
With government, corporate and household debt now estimated to account for 240% of national income, evidence of a further slowdown in the Chinese economy will hit markets across the world, and possibly signal the beginning of the next financial crisis. UK exporters will clearly be severely affected by any reduction in growth, particularly as China now represents our sixth biggest market.
While political events may dominate the headlines in 2017, a hard landing for China could have the greatest impact on your investments.
Paul Summers has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.