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Balancing Vigilance with Optimism The second quarter of 2025 was anything but quiet—marked by Liberation Day (and the quick policy reversal shortly thereafter), Moody’s downgrade of US debt to Aa1, and a flash point in the Middle East between Israel (and its ally the US) and Iran.  Yet if we’d simply hibernated for three months, we would be waking up to global equity markets that were up over 11% for the quarter, resulting in a 10.1% return through the first

Having experienced the tech bubble, the global financial crisis, and the pandemic-era dislocation, we are no strangers to volatility. But this past week stands apart—not for the size of the moves alone, but for the speed and sentiment-driven nature of the swings. The level of market chaos feels disconnected from fundamentals and is, instead, tethered to the unpredictability of policy signals coming out of Washington. As illustrated by the chart below, policy uncertainty is now at unprecedented levels. The Fragility

One of the trends we spotlighted in our most recent quarterly commentary is the current valuation levels in public equity markets and what it means for forward-looking returns.  There’s no doubt that valuations can remain extended for a prolonged period.  However, history has shown us that markets that start at current levels typically experience lower returns over the ensuing 10 years.  The charts below are from the J.P. Morgan Guide to the Markets, and they highlight two concepts in graphical

As we step into the new year, it’s natural to pause and reflect on the road behind us while considering what lies ahead. For investors, this moment often brings a flood of market predictions, an annual tradition as enduring as it is flawed. Rather than attempting to predict the unpredictable, our aim is to explore the economic trends, policy shifts and market forces likely to shape the 2025 economic outlook for investors in the months ahead. By focusing on the

Investment Themes – What Matters? There is no absence of storylines vying for investor attention as we enter the last quarter of the year and review the investment themes. The Fed shifted its policy stance in September and markets are now trying to process the outlook for interest rates in the near term. To make the situation more complicated, we are also less than a month away from elections here in the United States. Despite this, portfolios are faring well

Volatility Ahead Over the first half of the year, we’ve seen a bifurcation of experiences across our three major asset categories: Equities, Bonds and Real Assets.  For equity investors, the story has been the resilience of the economy, the growth of profit margins and the momentum behind AI—evident in Nvidia’s 150%+ return so far in 2024.  Fixed income markets have been comparatively volatile due to the moderation of rate cut expectations and the growing consensus surrounding a higher for longer

The world is an uncertain place—it always has been and always will be. The recent past is a perfect reflection of that reality—a global pandemic, multiple military conflicts, monetary policy shocks, natural disasters, and the list could go on. Yet the power of human ingenuity and the resilience it has helped develop means that we are constantly improving the way in which we face these dynamic challenges. In a period of time when optimism seems scarce and criticism and concerns

How should investors make sense of what is happening in the markets and what is happening across global economies?  It’s admittedly THE million-dollar question.  Short-term interest rates are the highest they’ve been since the global financial crisis in 2008/2009.  As the two charts below illustrate, companies in the US are facing declining profit margins and are taking a cautious approach to future capital expenditures.  Lastly, real estate markets across the US are having to contend with a financing market that

There has been a lot for investors to digest throughout this year—the war in Ukraine, persistently high inflation, one of the fastest rate hiking cycles in history and the residual impact of a globally disjointed COVID response and reopening policy.  The result has been broad-based asset class declines, in which—as the chart below highlights—only commodities and cash have been spared.  The magnitude and the breadth of the decline stand out when viewed through the context of the last decade.  In

As the third quarter draws to a close, we find ourselves in one of the first prolonged down markets since the global financial crisis.  In a way, it is natural to believe that “this time is different” because, it has been.  The previous bear market during COVID and the “almost” bear market in Q4 2018 were very quickly resolved—in both cases, the markets had recovered from their lows within about 3 months.  Ironically, we are now faced with the consequences

While the official advance release of Q2 GDP from the Bureau of Economic Analysis will not be until later this month, the Atlanta Fed produces their GDPNow forecast, which is designed to be a “live” tracker of economic growth that adjusts to various data releases throughout the quarter.  Based on the latest release this week, it estimates Q2 GDP as having declined by 1.2%.  If this estimate holds true—which is admittedly a big “if”—this would imply, by the most basic

Earlier this year, we wrote about the implications of Russia’s invasion of Ukraine. While the markets were reacting negatively to the news of the conflict, in reality inflation and Fed policy had already been weighing on investors’ minds.  With the news of the FOMC’s decision to raise interest rates by 50bps last week and the corresponding volatility that has returned in both equity and bond markets, it seems investors have awoken to the reality that the economic conditions moving forward