Our Investment Strategy & Research Group provides insights on the markets once a month (Economic Flash), each quarter (Economic Outlook), and whenever the markets or investments warrant special attention.
Back to What We Think.
The 2010s were fantastic for US stocks. But what about the 2020s? LNWM Sr. Investment Analyst Josh Hile makes the case for a globally diversified portfolio to take advantage of higher growth and lower valuations in foreign markets in the decade ahead.
Low interest rates. Low inflation. Low unemployment. These are the makings of a “Goldilocks” economy, which helped drive stock prices up nearly 30% in 2019. But 2020 could be different, as the longest bull market in history grapples with a US presidential election and the limits of monetary stimulus. Find out how we are positioned and key metrics we are using to determine if/when to change course.
Even if US corporate earnings growth rebounds in 2020, a key question is: How much of that growth is already reflected in stock prices given the 2019 surge? A fair amount most likely. High valuations aside, we do not see a catalyst at this time for a substantial market correction.
We remain marginally biased toward risk reduction and recommend topping up exposures to core fixed-income and other more defensive sectors, such as infrastructure equities. At this time, we don’t recommend investors make dramatic shifts as there remains upside in our view.
Say you want to invest in line with your values. How do you actually start? Find out about the various levels of impact you can have through your portfolio and how we partner with clients to make that happen, in this Q&A with CIO Gino Perrina and Jeanne Goussev, head of LNWM’s fiduciary services.
Economic indicators are pointing to slower US growth, and political turmoil is on the rise. While Federal Reserve policy remains accommodative, lower interest rates only go so far given the global nature of our economy. Find out what key factors we think will drive returns for the remainder of this year, and changes we’ve made to portfolios ahead of 2020.
There is no denying that the economic environment isn’t as robust as it was 12 months ago. We continue to recommend positions in core fixed income, infrastructure and alternative assets to add ballast to portfolios, given relatively high stock valuations and lower expected earnings growth.
Even though the US economy is showing some signs of weakness, the US appears better-situated in the near term than most foreign markets. A big plus is that with US inflation in check, the Fed is likely to remain accommodative, lowering its key interest rate again this September.
The Fed cut interest rates for the first time in ten years despite many positive economic indicators, such as strong earnings and low unemployment. Uncertainty of trade war impacts and slow business investment seemed to drive the Fed’s decision. Fortunately, the inflationary consequences often associated with rate cuts feel unlikely.
US Stock and bond markets are back to new highs, thanks to the Federal Reserve’s willingness to lower interest rates, as soon as this month. Will lower rates help extend what is now the longest economic expansion in US history? Probably. But this added stimulus could cause problems in the longer-term. Find out how we are positioning portfolios in light of rising economic uncertainty.
Private Equity, Private Debt, Private Real Estate. The investment options available in the private markets have soared in the past decade, just as the number of publicly traded US equities has dropped 50%. LNWM Senior Investment Analyst Josh Hile and LNWM Client Advisor Brian Whitaker team up to explain why we see opportunity in private market investments, and how we help our clients consider private investments in context of their needs and goals.
As in times past, most notably the mid-1980s and 1990s, the Fed has been able to prolong economic expansions by cutting interest rates, and that is what they are likely to attempt in 2019-2020. Having maintained the bulk of our equity exposure, we were able to participate in the equity rally so far, and we remain optimistic for portfolio returns through the end of the year.
Based on what we’re seeing, the US economy still has room to run. While economic data has been mixed (and has been for several years), a strong US labor market and generally healthy consumer spending continue to give us confidence in the near term.
As equity markets have continued to storm ahead, we have taken small but meaningful steps to reduce risk in portfolios. No, we don’t think it’s time to “Sell in May and go away” but we are reducing risk marginally, as opportunities are presented.
“Real assets” – everything from toll roads to real estate and utilities – can increase portfolio diversification, lower risk, and provide opportunities to enhance returns. At a time when financial asset prices (stocks and bonds) are near all-time highs, Senior Investment Analyst Josh Hile explains how and why we’re adding real assets to client portfolios.
The US is not immune to slowing global growth, and we think market volatility could bounce back despite the first quarter’s strong performance. Find out why we are maintaining well-diversified and relatively lower-risk portfolios for now — and resisting the “Fear of Missing Out.”
Is your investment portfolio strategically managed to maximize returns after taxes? The difference in net return can be significant over time, especially for high-net-worth families and individuals.
Entering 2019, our top concern was whether the Fed would do too much, too soon, and over correct the economy. Their adjusted stance has relieved some of these fears but LNWM remains cautious.
Our outlook on the global economy has softened somewhat. We still believe the US is on track for moderate growth in 2019, but the extent to which equity markets have priced in that growth in just two months gives us pause. Meanwhile, consumer, real estate and manufacturing data have all taken a step back.
We think the US is on track for moderate economic growth in 2019, but that doesn’t mean the equity markets will necessarily continue to run up from here. The relative strength of corporate earnings will be key for investors and ultimately determine how successful our US equity positions are for the year.
Risk has certainly increased in the markets, but there are also many things that can go right in 2019. LNWM CIO Gino Perrina explains how we have positioned LNWM portfolios to lower risk and be ready to capitalize on new opportunities.
A major new tax break is now available for capital gains re-invested in Opportunity Zones. Chances are there is an Opportunity Zone near you, since there are 8,700 across the US. Find out what this can mean for you from LNWM’s Managing Director of Fiduciary Strategy, Carla Wigen.
LNWM Investment Analyst Nathan Barnard explains why hedge funds are not technically a hedge against stock market declines. That is, when stocks drop, so might hedge funds and vice versa. What makes hedge funds valuable is their different levels of correlation to stocks, which can lower risk without sacrificing returns over time.
Seattle’s Pioneer Square, Oakland, CA, Long Island City, NY and even Provincetown, MA. These are a few of the newly defined Opportunity Zones, low-income areas that are attracting loads of attention from investors. The draw: capital gains invested in these areas get major tax breaks. LNWM’s Carla Wigen and Kristi Mathisen explain.
We’ve gone from a just-right, Goldilocks Economy to a Red Riding Hood Economy, where danger seems to lurk around every corner. Risk has certainly increased in the markets, but there are also many things that can go right in 2019. Find out how we have positioned LNWM portfolios to lower risk and be ready to capitalize on new opportunities.
Strong consumer and wage data indicate stable (if not robust) growth, and the risk of recession remains low, even as the drama of the trade war continues to play out. Within equities, we are emphasizing sectors that tend to perform well during the latter parts of economic cycles and downturns, such as infrastructure.
Learn the basics of risk management and how to lower risk so you can sail through market turbulence.
Learn the questions we ask to get you where you want to be through strategic solutions that benefit you, your family, and your business.
There is higher uncertainty about the pace of global economic growth and the path of interest rates, despite the Federal Reserve telegraphing fewer rate increases in 2019. We are looking to reduce risk at the margins while continuing to emphasize asset classes that tend to perform well during the late stages of economic cycles. In fixed income, we remain invested in strategies that have a flexible approach to both interest rate risk and credit risk.
Clearly market volatility has returned and investors are more cautious. As mentioned in our most recent outlook, trade tensions, rising US interest rates, and a stronger-than-expected dollar are at the root of this repricing, particularly for growth-oriented stocks.
All investors are subject to emotions and faulty logic, to varying degrees. In this paper, LNWM senior analyst Josh Hile explains the different biases and how LNWM uses behavioral finance theory to identify bias in the asset managers we invest with, as well as within our own investment team.
Market volatility is back in a big way. But that does not necessarily mean a bear market is in the offing. Stocks are facing stronger headwinds from further increases in US interest rates, trade tariffs and a stronger dollar, yet valuations are generally reasonable and earnings still growing nicely. Find out how we’ve positioned portfolios in light of higher risks.
We believe the Fed will continue to raise interest rates, and that investors are not yet fully appreciating the impact rising rates will have on the financial markets. We are focusing on fixed-income strategies that have less sensitivity to interest rates and slightly more exposure to credit risk.
There’s strength in the US economy. But trade tensions, rising US interest rates/inflation and tougher comparisons for US corporate profits are likely to create headwinds for US equities in the coming year. We are therefore maintaining globally diversified portfolios, including an allocation to emerging markets, many of which we think have stronger fundamentals than the recent price drops suggest.
US equity markets continue to chug along, but for how long? Gino Perrina, Chief Investment Officer at Laird Norton Wealth Management, outlines the factors driving markets here and abroad. Plus, the importance of portfolio diversification at a time of rising risk.
Our take on Bitcoin — what it is, its value as an investment, and how the underlying technology is likely to revolutionize how businesses process transactions. By Josh Hile, Senior Investment Analyst at Laird Norton Wealth Management.
We expect the 2017 tax cuts to continue supporting US GDP growth and corporate earnings through 2018, although Q2’s GDP growth of around 4% could be the high point for the year.
Index funds have been all the rage during the decade-long bull market. But they’re not always the best way to invest at all times. LNWM Senior Investment Analyst Josh Hile examines why we use both actively managed funds and index funds in LNWM portfolios.
The fundamentals are looking good: strong corporate profits, a job market in high gear and tame inflation. What could go wrong? Plenty. The escalation of trade disputes, overzealous monetary policy and geopolitical tensions are clouds on the horizon. Find out what we envision for the rest of 2018.
The underperformance of foreign markets is due mostly to the strength of the US dollar, which we think could prove temporary in light of rising US inflation, deficits, and flattening of the yield curve (short-term rates rising faster than longer-term rates).
A tight labor market makes it more likely that inflation will begin to rise faster than 2% annually, providing cause for the Federal Reserve to continue raising interest rates. We expect a rate increase mid-June and at least one more by year-end.
US equities could continue to rise in 2018 on big earnings gains vs. 2017, plus a near-term rebound in economic growth. A major concern: the potential for rising interest rates as the Federal Reserve tries to fend off the inflationary effects of a tight labor market amid an expanding economy.
The near-term outlook for markets and the economy is good, boosted by the 2017 tax cuts. Longer term, however, we think markets are particularly vulnerable to a dramatic increase in interest rates. We discuss the factors driving interest rates higher, and how we have positioned LNWM portfolios as a result.
There are valid reasons for the drop in US equities so far in 2018 — profit taking, concern about trade wars and potentially stricter regulation of US tech giants. Underlying these headlines we see a stable US economy in the late stages of expansion that should continue to provide near-term opportunities for return, albeit with higher volatility.
Higher stock market volatility is likely to become the norm as uncertainty about the pace of interest rate increases around the globe remains at the forefront of investors’ minds. Additionally, a risk we identified earlier this year — the potential for protectionist US trade policies, such as high tariffs that disrupt markets — has increased.
As goes January, so goes the year? Current market and economic fundamentals support a positive finish for 2018. However, we think inflation is a rising risk for both stock and bond valuations. In fixed income, our focus on strategies less vulnerable to rising interest rates is proving to be beneficial. In equities, we are adding positions likely to benefit from inflation, such as infrastructure and commodities.
Tax cuts are likely to boost the US economy even more, resulting in rising stock prices (at least in the near term), higher inflation and interest rates. Find out about the adjustments we are making to LNWM portfolios to prepare for the shifts in US monetary and fiscal policy as we head into 2018.
Heading into 2018, we are not reducing our overall allocation to global equities. We do expect to shift our equity mix to incorporate sectors that offer value and are likely to benefit from a pickup in inflation.
We expect strong Q4 economic growth and corporate earnings to support equity markets through 2017. However, given higher valuations and more difficult earnings comparisons in 2018, we continue to evaluate more defensive positioning.
Explore how our investment process focuses on 4 key areas, which we believe can add significant value to investment portfolios over a full market cycle: 1) Asset Allocation; 2) Manager selection; 3) Tax-aware investing; and 4) Integrated wealth planning.
Find out how we manage portfolio risk by using tools that allow us to assess risk in multiple ways, including: Probability of a loss in any one year; Stress-testing and worst-case scenarios; and Risk/return optimization.
Learn about the in-depth due diligence we do to identify and select investment managers and how this allows Laird Norton Wealth Management to excel at meeting its investment objectives.
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