Despite volatility in the markets during the first month of 2016, investment managers share a good bit of optimism for the year as a whole, particularly where the U.S. is concerned.
Unemployment continues its downward path, and we believe that the Federal Reserve’s long-awaited interest rate hike is a sign of growing confidence and that sustained low oil prices have jumpstarted consumer spending — all surefire signs of positive economic growth.
Within the context of an appropriately diversified portfolio, some analysts are currently favoring high-quality investments in both equity and fixed income markets. Furthermore, developed countries, such as the U.S., Europe and Japan, are projected to outgrow and outperform emerging countries. In terms of 2016 market performance, Bank of America Merrill Lynch analysts lean toward equities over bonds and commodities, but caution that they expect overall lower returns and higher volatility than we’ve experienced in recent years.
If you’ve been sitting on the sidelines due to the recent volatility, we invite you to contact us for ideas on strategies with the goal of how you might be able to take advantage of corrections and rebalancing opportunities. As always, we’re here to answer questions and help you stay on track with your long-term plan — whether you need reassurance to stay the course or are interested in a more active management approach.
[CLICK HERE to read the article, “Outlook 2016: A Year of Global Transition,” from Merrill Lynch, 2016.] [CLICK HERE to read the article, “Outlook 2016,” from Merrill Lynch, 2016.]
From now until 2020, the investment analysts at Columbia Threadneedle expect modest fixed-income asset total returns, equity returns slightly below their long-term averages and below average returns for global equities.
Most managers view China as the biggest risk in 2016. Its declining gross domestic product has been blamed for much of this year’s market volatility in the U.S., and has caused a detrimental effect throughout the world’s economy.[CLICK HERE to read the article, “2016 capital market assumptions,” from Columbia Threadneedle, Feb. 1, 2016.]
The analysts at private investment manager GMO are also optimistic about both the U.S. and Canada. The combination of available investment capital, investor willingness to incur higher market risk and both countries’ inherent land and water resources make us more resilient against potential setbacks.
[CLICK HERE to read the article, “Grantham Sees Brighter Future than Most,” from Financial Advisor Magazine, Feb. 3, 2016.]
Guggenheim investment managers predict U.S. unemployment will drop as low as 4 percent, new home construction will increase and -- interestingly -- El Nino weather patterns will contribute a boost to GDP growth this year.
[CLICK HERE to view macroeconomic charts, “10 Macroeconomic Forecasts for 2016,” from Guggenheim Investments, Jan. 2016.]
No matter what economic indicator you prefer, we’re here to try and offer clarification and help you determine the most appropriate financial path for your situation.
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