FOX Foresight – Appeal of Direct Investing shows the growing interest in private company investments. It tells the story of families who are pursuing this opportunity, highlighting the top themes from FOX's research and ongoing conversations with FOX members.
While 2018 will have a difficult time living up to 2017’s stellar returns, we believe the markets should still have a more-than-decent showing. Central to this generally optimistic view of the markets is our expectation that the global economy is fairly healthy. Broad-based synchronized growth, which began in 2017, should continue into 2018 and deliver real gross domestic product growth of 2.7% in the U.S. and 3.8% globally. With that growth, financial markets should be positioned to deliver a solid year of returns.
The supply-and-demand dynamics are setting up for a very good year for municipal bonds relative to Treasuries. New-issue supply will most likely drop materially from above $400 billion the last two years to below $300 billion, which would be a low supply not seen in over 20 years. Demand will be particularly strong from high net worth individuals that reside in states that have high in-state income tax regimes.
Despite historically low interest rates and increasingly favorable economic conditions, inflation has remained persistently below the Fed’s 2% target for nearly six years. While stubbornly low inflation would have been cause for alarm in the past, few seem to be worried. With other economic indicators headed in a positive direction, the Fed has indicated its intention to continue to raise rates in order to achieve equilibrium between the federal funds and inflation rates and wind down its quantitative easing program.
The real estate private equity market has been an attractive asset class with record fundraising market performance and increasing investor allocations. Within real estate investments, the single family rentals (SFR) market has a strong outlook. The highly fragmented SFR market presents an opportunity for real estate funds to leverage its industry expertise and capitalize through institutionalization. Through effective buying, managing, and selling, SFR funds are able to create value and deliver satisfactory returns.
All investments have impact—positive, neutral or negative. Despite—or perhaps because of—the challenges Brazil faces, leading Brazilian families are putting capital to work to build the impact investing ecosystem, promote social and environmental good, establish a culture of sustainable, transparent business and demonstrate the possibility of financial return alongside impact. The diverse set of social and environmental challenges in Brazil means there are opportunities across sectors, geographies, return-profiles and impact strategies for families to get involved.
Cryptocurrencies, or digital currencies, have captured the imagination and interest of investors around the world. Three main factors have driven this interest: the role of cryptocurrencies as bold new upstarts in the world of electronic payments; their meteoric rise in value since they were created less than a decade ago; and the perennial search for long-term stores of value in the face of geopolitical uncertainty.
For investors who can withstand the risk, investments made to support climate change and generate competitive returns can be found in the private equity markets—it’s one of the top five ways to adapt your portfolios to climate change and support the Paris Climate Agreement. Another way is to integrate your values with your investments by using environmental, social and governance (ESG) data.
Signs point to the U.S. economy being near or in a late (or pre-recession) stage, yet stock market valuations are elevated and inflation is inexplicably soft. We share its outlook for the U.S. and global economies and—in light of stretched valuations, low bond yields, and expected higher volatility—where qualified investors can look for investment opportunities.
At more than one thousand pages, the new tax reform package has plenty of both carrots and sticks for U.S. taxpayers. Both the short- and long-term effects of the new legislation on economic growth in the U.S. are uncertain at this point, but changes in the tax code will undoubtedly confer both benefits and penalties on certain segments of the U.S. economy. Until the tax accountants ferret out every new wrinkle, let’s examine the most likely impacts that the new law will have on the investment landscape in the coming years.