Rate cuts don’t happen in a vacuum—staying nimble with asset allocation can help investors adapt.

The surge of the coronavirus omicron variant has implications not only for broader asset-class allocations but also for macro exposures within asset classes.

Today’s bond yields are extremely low, and some multi-asset investors may be struggling to rationalize exposure to interest-rate driven assets such as government bonds. But past experience suggests that they can still be effective diversifiers over the near term, even at low yield levels.

As risk assets tumbled in late February and March, it intensified the focus on risk management: How can multi-asset strategies defend against turbulence while positioning for an eventual rebound? The answer: Be ready to adapt—and to do it quickly.

The recent decline in US corporate cash hasn’t raised a lot of eyebrows, but it has caused one of our equity-quality indicators to flash a warning. Since equity quality is one of the signals with a strong track record of predicting market sell-offs, should investors be worried?

The US yield curve dipped into inverted territory recently. But that’s not necessarily a bad omen for equities. There are several important warning signals—and lately the yield curve’s slope is the only one flashing red.

It’s taken for granted in financial circles that lower oil prices are a boon for stocks, as they fuel an economy-boosting cycle in which money saved at the pump ultimately flows to the market. But oil prices that are too low could be too much of a good thing.

Despite uncertainty about global politics and policy, stock markets are soaring and volatility is low. Does this mean it’s time for investors to double down on growth-oriented assets? Not necessarily.