The power of the purse is increasing at a rapid pace. A third of the world’s financial assets is now under the control of women. From 2016 to 2019, they accumulated wealth at a compound annual growth rate of 6.1%. Over the next four years, that rate will accelerate to 7.2%—adding $5 trillion more annually to the global wealth pool, according to a comprehensive global study.
As we survey the U.S. economy, we see pandemic-induced pain that, did we not know better, could easily obscure the renaissance we foresee later this year. The labor market remains severely impaired, with the total number of Americans holding down full-time jobs 7% from the preCOVID-19 peak. Small businesses continue to shutter at historic rates. Interest rates have spiked higher. And consumer savings has reached record levels while the spending rebound has stalled.
It would appear, at least from the perspective of investors, that 2021 is intent on being as memorable as its predecessor. In the first month alone, unprecedented events in the political, health, and market spheres have contributed to equity volatility. We expect this volatility could continue in the near term, particularly as many assets are trading at elevated (in some cases excessive) valuations and the short-term economic outlook remains challenged.