Continuing the Climb
While there is ample reason for optimism in the months ahead, many risks to the outlook remain as we continue the climb past peak growth and peak policy accommodation.
Since we issued our last Global Market Outlook in December, vaccination rollouts and robust monetary and ﬁscal support have accelerated the pace of economic recovery. COVID-related challenges remain acute in many areas, but the situation is improving, even in hard-hit emerging markets. As the US economy surges, European growth is poised to accelerate; emerging markets will soon follow. It appears that US market leadership may soon give way to international markets
If earnings are the engine keeping stocks climbing the wall of worry to reach new heights, Michael Arone argues that future earnings results could be the market’s biggest risk.
Factors such as Value, Size, Momentum, Quality or Volatility are employed to identify stocks with specific characteristics. Such stocks are then used as part of an investment strategy to generate potential returns above a specific benchmark. We analyze the pros and cons of two popular factor investing approaches – single-factor exposure and factor-timing process – and suggest that a multifactor bottom-up blending approach combines the benefits of both and offers the best risk-adjusted returns to investors.