Stay attuned to value opportunities
We were previously cautiously optimistic on market performance and portfolio construction amid one of the most volatile investment environments in memory, and such guarded perspective and positioning yielded mostly positive results for much of the summer. However, investor confidence has now dissipated in the face of the relentless determination by global central bankers to rein in historically elevated levels of inflation — even if doing so means sacrificing economic growth.
Looking towards the balance of 2022, one thing is clear: we are not out of the woods yet. Both the global economy and global investment markets continue to be waylaid by familiar risks. That does not mean investors have to wander the woods with no trail-markers. In the US, for example, even if the Federal Reserve’s inflationfighting pushes the economy into recession, the combination of resilient labour markets and household balance sheets points to any such downturn being mild and relatively short-lived.
