Investment Outlook 2019
- There has been a lot of noise in financial markets in 2018, and this generated episodes of volatility (i.e. fluctuation in investment returns). However, overall volatility is still low compared to history.
- A number of growth-sensitive asset classes have become significantly cheaper over 2018, and we think they now offer good value – especially Asian equities and emerging market equities.
- In multi-asset portfolios, we also think there is value in some US Treasuries, especially compared to European government bonds.
- The improvement in the market value of US bonds during 2018 also means that we have the opportunity to buy more defensive asset classes at better prices, to help us diversify.
- Given the macro backdrop today, it’s important to be diversified, to be willing to ride out phases of volatility, and to be adaptive to any changes in the environment. We think it is “back to reality” in 2019.