Another week, another dollar. This time the dollar had a plus sign in front of it. Much as has been the case for the past 10 weeks, equity markets continue to ebb and flow. Flowing is always better of course, but it is our view that markets will continue to trade in a fairly narrow range, until some catalyst provides the cause for a clear direction either way. So what would that be? Generally speaking this would be better than expected economic news across the board. That said, a synchronized and sustained economic recovery is not what we see when we look ahead. Rather, a weaker than normal (given the unprecedented fiscal and monetary stimulus that has occurred since 2008) recovery, characterized by uneven growth and even a few surprises.
So what does this mean for investors? Simply put, 'lower-for-longer', meaning investors can expect lower interest rates, lower inflation and lower economic growth rates for longer then we had hoped for. Still, opportunities for gains are always there, and we remain confident that your institutional money managers are well-positioned to capitalize on these where they can be found. And while we are waiting for this to happen, the bond components in our model portfolios earn their interest every month for our clients. Being paid to wait is not a bad thing at all. So is patience at times like this.