15 November 2018: Finding value and managing risk
– The cycle is maturing, but economic data in the three biggest developed markets isn’t pointing to an imminent peak in the business cycle.
– Even on our below-consensus estimates for 2019 earnings, emerging market, Eurozone, and US equities look attractive relative to high grade bonds.
– While we acknowledge the risks in a more uncertain environment, it’s important to recognize the potential for positive surprises around China’s slowdown, US-Sino trade tensions, and European growth.
– In our view, October’s sell-off created an opportunity and this month we increased our overweight to global equities.