Although an inverted yield curve is not a sign we welcome, it also is not a clear indicator of an imminent equity market downturn. Instead of underweighting risky assets, we suggest investors take this opportunity to refresh plans to manage through the next bear market.
No, we don’t believe the politics of Brexit are conducive to tactical asset allocation.
Many corporate defined benefit plans experienced significant funded status gains in recent years. Recent capital markets volatility, however, has set many plans a few steps back, re-focusing plan sponsors on both protecting long-term funded status gains and closing the asset-liability deficit. Given increased volatility in global equity markets, relatively high valuations in many market segments, and the late stages of the economic and credit cycles, optimizing the plan’s growth engine is more critical, and challenging, than ever. This publication provides a framework for how to do so in the context of the evolving market environment.
In this edition of VantagePoint, we compare and contrast the late 1990s and today; our intent is to help investors navigate this recent downturn and the next recession-related bear market (which may already be in progress), and to position their portfolios for long-term success.
Families with multigenerational wealth may be particularly well positioned to consider allocating 40% or more of their assets to private investments. Assuming these families have the requisite long-term time horizon, patience, and ability to act quickly, they stand to benefit not only from the potential for higher returns but also from the tax-advantaged nature of private investments. Life could get better after 40%!
Investors should expect more volatility in 2019, as many of the trends and political dynamics that have rattled confidence over the last few months seem unlikely to dissipate in the months ahead.
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.
Fourth quarter’s edition summarizes five articles on environmental, social, and governance (ESG) data.
The most effective investment strategy will acknowledge the uncertainty associated with future cash flows, but avoid being overly conservative so as not to impair future cash flow generation.
Because the US economy has entered the late stage of the economic cycle, investors should consider the prospect of a bear market recession, even though one does not seem imminent.