Our Chief Investment Office and experts share insights into our house view and macro trends.
Markets have rallied in 2019 so far. But have they gone too far? We think this quarter's returns may have borrowed somewhat from the expected growth in the second half of the year and hence we feel a little uncomfortable about chasing them.
We believed that the investment landscape was not as bleak as some market participants were suggesting at the end of 2018, and it is encouraging that investors have now seemingly adopted a much more positive mindset, as evidenced by the sharp recovery in equity markets since their December lows. So, has anything substantial changed in investment markets since the end of last year?
When Donald Trump was elected in November 2016, markets soon applauded him as a tax-cutting, regulation-slashing, business-focused President. The welcome mat was withdrawn during 2018, however, as trade wars started to unnerve investors and stall business spending.
Forecasting returns and markets in 2019 is fraught with danger, as unpredictable political events may continue to cause volatility. However, in staying focused on the economic fundamentals, we see more upside than downside next year.
When it comes to science and technology, our investment has never been just about the FAANGs (Facebook, Apple, Amazon, Netflix and Google). We want to capture the potential growth in areas like eSports (online competition gaming), artificial intelligence, robotic automation, and voice activation.
Some investors shun convertible bonds, finding them hard to pigeonhole, and mistrusting their 'geeky' reputation. Basically, though, they are misunderstood and deserve a place in your portfolios if you're thinking about investing in 2019, particularly at this time of rising interest rates.
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IMPORTANT: Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. Past performance is not a reliable indicator of future performance.