In the June issue of our monthly flagship publication, we feature:

  • On the Record by Chief Investment Officer Tony Roth, where he says it’s unwise to drive a stake in the ground and claim certainty as to the future, and notes the economy and markets are together levered to progress on three fronts: vaccine research, stimulus relief, and the reopening of economies globally.
  • In Focus by Head of Investment Strategy Meghan Shue discusses that most tempting yet challenging investment strategy of trading in and out to time the market’s highs and lows—and advises which approaches have resulted in greater, long-term success.
  • Investment positioning and international equities asset class overview.

 

 

For months now, an invisible virus has dominated headlines and our national consciousness until it recently receded as the blight of racism reared its ugly head once again. It’s always present, often just lurking below the surface, but at times like this, it reemerges tragically, publicly, and violently. These two equally insidious forces—one nature-made, one man-made—are actually interconnected. In the wake of the tragedy in Minneapolis, we see scores of cities with shoulder-to-shoulder protesters and the U.S. Surgeon General Dr. Jerome Adams has warned the close contact could contribute to the nation’s next spike in COVID-19 cases. Both crises are also sure to impact the election in November and deepen the human, economic, and market tolls.

We will monitor these impacts as we go forward and this month, we detail the most recent developments of the virus and the growing chasm in terms of how investors see prospects for the future. The bulls (optimists) tend to be focused on the rapid progress of vaccine research, unprecedented levels of stimulus injected by the global monetary and fiscal authorities, and the accelerating pace at which states are reopening. The bears (pessimists) are often more focused on the likelihood of a second wave and lasting scars on the global economy, particularly small businesses.

Despite an invisible pressure to “take sides,” we think it unwise to drive a stake in the ground and claim omniscience on the path forward. As noted in May’s Capital Perspectives, the virus remains in charge, and no one knows what course it will permit. Instead, I wanted to use this month’s letter to shed light on the three key areas we are most closely monitoring—areas that will determine whether the economy and markets fork right or left—as well as how we are managing portfolios at this extraordinary time.

In our view, the economy and markets are together levered to progress on three fronts: vaccine research, stimulus relief, and the reopening of economies around the world. All three offer reasons to be cautiously optimistic.

Please see important disclosures at the end of the article.

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