Our global team of investment strategists warn that investor expectations have run ahead of market fundamentals in the global equity markets. They maintain a call for caution as inflated expectations for global growth and U.S. fiscal policy drive markets higher, despite looming global economic headwinds.
Recent months have been unusually eventful, characterized by a swing in the global political landscape, U.S. dollar strength, geopolitical flash points, demonetization in India and military coups in Turkey (among many others), all feeding into general market nervousness and a significant rise in volatility. This was certainly the case in emerging markets.
Since 1995 mid-cap stocks have outperformed large- and small-cap stocks. Investors that are under-allocated to the mid cap asset class are potentially accepting greater risk AND missing out on available return. Mid-cap companies often exhibit the nimbleness and growth potential of small caps with the stability of large caps while accepting, but potentially, reducing the risks of both.
One topic noticeably absent from the recent presidential election was the U.S. government debt. In fact, the topic seems to have fallen from public consciousness. In the medium term we do not expect current debt levels to cause a shock, but the longer-term effects could drag on growth, especially with an aging population and sluggish economic growth.
Investors have been drawn to real assets in general and to real estate in particular due to the comparative stability and attractiveness of their income returns and the prospects for growth.
The board’s expertise constitutes a valuable input into our investment process.
This piece brings together all the Private Wealth Management research teams on a topic of common interest and current importance.
Wasatch Advisors has been investing in India for well over a decade. We hope this paper will illuminate why we remain excited about the investment opportunities there.