Market turbulence across the globe has created a sea of red lights for market dashboards, but it has also created some interesting potential opportunities uncovered by our multi-asset team’s nimble and systematic data approach:
- We may not know the bottom of the market yet, but longer-term value in financial markets is being restored as interest rates rise and stock valuations fall. The long-term return profile of a 60/40 balanced portfolio has improved substantially given recent market drawdowns.
- A host of developed and emerging market countries are trading at what appear to be bargain basement prices. There are pockets of attractive value in the US including value stocks, small caps, energy, and financials, particularly banks.
- Commodities are still attractive as an inexpensive inflation hedge (although secular forces support rising commodity prices, they are at risk in the event of a global recession).