In the October issue of our monthly flagship publication, we feature:
- On the Record by Chief Investment Officer Tony Roth, Bent but not broken: resilience and recovery after the storms.
- In Focus provides a high-level overview of bitcoins—what digital currency is, why it was created, and how it works.
- Investment positioning, major themes, asset class updates.
In the past two months alone, the United States has been battered by a spate of natural events—three staccato-paced massive hurricanes. We have also experienced a kick to our collective gut with a tragedy of the unnatural, inhuman variety—the Las Vegas mass shooting which was the deadliest in recent history. Around the world, there are other non-economic shocks, such as the escalating saber-rattling with North Korea.
Despite the tragic human and political toll, both realized and potential, evaluating each of these events from a capital markets perspective reaffirms our support for an overweight to equities over fixed income. Our view stems from the belief that the global economy is experiencing a period of sustained economic reflation. The Purchasing Managers Index, a marker of overall economic health, showed an upturn for emerging markets in September that was the highest since February of 2016, above the counterpart readings for the developed world for the first time since April 2013. In the U.S., readings showed an uptick from August to September that was the highest since May of 2004. At the same time, we believe price inflation will remain at structurally low levels, which has led us to shift the distribution of real assets in portfolios.
Please see important disclosures at the end of the article.