No, we doubt the equity market’s heightened tech concentration will trigger an imminent correction. Rather, tech stocks’ outsized weighting reflects their superior growth and free cash flow this cycle. Amid a lackluster macroeconomic backdrop, historically low discount rates have boosted the appeal of the most profitable and liquid segment of the global equity universe, namely…
Our thoughts on key macro questions, emerging opportunities, and risks in 2020.
No, sterling-based investors should not change their currency hedge ratios or their allocations to sterling-denominated assets based on potential Brexit outcomes.
Bear markets often trigger emotional responses that can sometimes lead investors to act contrary to their long-term objectives; as such they need simple strategies to help overcome their worst instincts.
No, we believe investors should maintain a modest tilt away from US equities and toward global ex US stocks.
No, we don’t believe the politics of Brexit are conducive to tactical asset allocation.
Though developments and headlines associated with the UK’s Article 50 negotiations with the EU to exit the trading bloc have been fitful, their impact thus far on the underlying fundamentals of the UK economy and sterling-denominated assets, particularly UK equities, has been moderate. Because Brexit is a political process with two-way tail risks, it warrants close monitoring but is not a good foundation for a tactical investment position By the same token, UK investors should avoid factoring in expectations of specific potential Brexit outcomes into strategic decisions regarding currency exposures.
Although we are more cautious heading into 2019 than we were 12 months ago, we still think a roughly neutral allocation to risk assets is the right approach.
In this report, we briefly highlight five key post-GFC developments and discuss how investors might adapt their portfolios to these changes.
No, investors should consider staying the course. Though developments and headlines associated with the United Kingdom’s Article 50 negotiations with the European Union have been and likely will remain fitful, they reflect more the political nature of the process and less the underlying fundamentals of the economy and its listed equities.