While recent equity pullbacks have provided under-exposed investors with attractive opportunities to re-enter the market, many remained spooked by memories of 2008.
Market risk remains low, with potentially disruptive macro events quickly discounted; this may lure investors back into equities where strong returns have failed.
Many emerging economies have struggled this year, but they are generally better positioned to withstand a currency assault than they were in 1997.
A plan that effectively balances building wealth and controlling risk better positions investors to pursue their goals in all seasons.
- The Fed is handing the baton to back to the markets for pricing risk, sending volatility higher on its path back to normal.
- Emerging markets health is vital to global growth, as they have doubled their contribution to global GDP over the past decade to nearly 40%.
- S&P 500 corporations derive half of their revenue from overseas; global consumerism and manufacturing provide ongoing support.
- Broad global diversification across equity and fixed income markets is the best way to protect against volatility.
- While the U.S. market was dominant in 2013, broad global equity diversification contributed to positive investment returns.
- Surging equity markets were an example of “upside risk” that hit some investors hard in 2013.
- Effective diversification should be meaningfully global within equity and fixed income, distributed broadly across asset classes and rebalanced on a periodic basis.
- If you invest like everyone else, you likely will experience the same sub-par returns that everyone else does.
- Forecasts for: S&P earnings, interest rates, oil, inflation and other key metrics
- How global economic expansion may sustain the bull market in 2014
- How global manufacturing and global consumers may drive worldwide growth
- How tectonic shifts in energy, technology, trade and frontier markets may pave the way to long term expansion