The U.S. stockA financial instrument giving the holder a proportion of the ownership and earnings of a company. market has had a remarkable run of gains over the last decade, leading many to question what we should expect from the markets in the years ahead. EquityThe amount of money that would be returned to shareholders if a company’s assets were sold off and all its debt repaid. Research Analyst Kate Austin discussed our 2020 market outlook in our recent quarterly webinar*: 2020 Conflicts—Impeachment, Tariffs & Global Dysfunction.
Please enjoy the excerpt below and click here for the full webinar replay to hear more.
Kate Austin: As nice as it would be to have past performance really predict future success or disappointment, it doesn’t really work that way. Like [Director of Research] Jeff DeMaso showed earlier, a gain in the market is usually followed by more gains, but not always. So we find that the best way to construct our portfolios isn’t looking backward at what worked in the most recent past, but to create well-diversified portfolios that should help you capture most of the upside of the market while protecting you on the downside.
Kate Austin: And the managers that we use and invest alongside with tend to do just that. We like to use not only U.S. equitiesThe amount of money that would be returned to shareholders if a company’s assets were sold off and all its debt repaid., which was what your question was about, but also international equities and of course a strong bondA financial instrument representing an IOU from the borrower to the lender. Bond issuers promise to pay bond holders a given amount of interest for a pre-determined amount of time until the loan is repaid in full (otherwise known as the maturity date). Bonds can have a fixed or floating interest rate. Fixed-rate bonds pay out a pre-determined amount of interest each year, while floating-rate bonds can pay higher or lower interest each year depending on prevailing market interest rates. allocation.
*Webinar recorded after the market closed on January 23, 2020.
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