Quarterly Update: The Tide Shifts

2018 was a tough year for investors, with most major asset classes finishing with flat-to-negative returns for the calendar year. Worries over monetary policy, economic growth, and trade wars are largely responsible for 2018's dismal results. Our view is that domestic economic growth will slow in mid-to-late 2019 but is unlikely to slip into a negative or recessionary territory, absent some “external shock." Trade conflicts, government shutdowns, and political instabilities (both domestically and across the globe) remain wildcards that could simultaneously disrupt underlying economic activity and tilt consumer and investor sentiment in a decidedly negative direction.