What a difference a year makes! During Q4 2018, the imposition of the first round of U.S. tariffs on imports from China, the cumulative impact of 200 bps of rate hikes from the Fed, and Chairman Powell’s comment that the Fed’s quantitative tightening program was on ‘auto pilot’ served to cause investors to flee from equities. Stocks took a 20% nosedive finishing down roughly 10% for 2018. A year later, Trump was cutting tariffs, the Fed had cut rates three times & since mid-September 2019 the Fed’s balance sheet had been growing at an annualized rate of 40%. Stocks were on fire, up 22% (TSX) to 35% (NASDAQ) for the year and investors chased equities into year end. Now with elevated valuation dispersion (good for ‘value’ stocks) but a modest outlook for growth (good for ‘growth’ companies), many investors are puzzled about what to do. After reviewing December and 2019 as a whole, this commentary will table a few thoughts and our bottom line on 2020.
Alternative asset manager offering investment solutions that find a balance between asset protection and capital enhancement.
Alternative asset manager offering investment solutions that find a balance between asset protection and capital enhancement.