Resource Search

With the ongoing pandemic, a weakening economic recovery, and the upcoming elections, emotions are understandably high. It becomes even more important to filter out the emotion, which is something the best investors do. Other topics explored in this issue includes taking a deeper dive on the importance of diversification and maintaining a long-term lens.

One of today’s dominant macro-trends is the reversal of globalization—the free flow of people, goods, services, capital, technology, and ideas across national borders. COVID-19 has further accelerated the deglobalization. In this environment, equity investors may have a harder time finding steady profitability and value. Taking a look at how we got here and moving forward, history provides insights on how to navigate the challenge.

While inflation continues to trend below target, the possibility for unexpected higher inflation shouldn't be ignored. A shift in Fed policy has resulted in a stance that lowers the likelihood of combatting inflation for the foreseeable future. And the impact of inflation on certain investment strategies should be considered during portfolio construction.

Although no previous election year had this year’s unique set of circumstances—a global pandemic, an economic recession, the fastest equity market correction on record (and subsequent recovery), multiple natural disasters, and social unrest—there are some insights available when examining the individual effect of each variable. Facing a year of momentous challenges and uncertainty, how should investors position their portfolios?

In this quarterly update, see the key areas of focus that drive investment returns and the implementation strategies around six themes that include a demand for responsible investment.

Global equities were hit hard during the first quarter of 2020, erasing most of 2019's gains. Credit-oriented fixed income was also hit, but to a lesser extent, while U.S. Treasury bonds perfored well. Investors may find portfolios out of balance relative to target allocations. Is now the time to rebalance?

The first half of 2020 was marked by a return of volatility to the global capital markets as the fallout from the COVID-19 pandemic rippled across the globe. The market rallied during the second quarter under an aggressive central bank policy, coupled with optimism that economic indicators had bottomed. Turning to the fall period, the landscape for the primary alternative asset classes starts with a hedge fund update and ends with how COVID-19 has dramatically changed outcomes for commercial real estate.

The markets moved higher during July and August as cities across the globe continued their re-opening plans after pandemic-induced shutdowns and central banks sustained their support for global markets. However, when September came, the market sentiment turned negative, with most risk assets posting losses. Still, the third quarter was solid overall, with most market segments posting positive results behind key performance drivers.

Despite the popularity of exchange-traded funds (ETFs), there are structural issues that make them less than ideal for many high-net-worth investors. A tax-managed separately managed account (SMA) may deliver the same diversified, index-like exposure while offering increased after-tax returns for these investors. The benefits can be substantial.