Our goal for Investment Perspectives is for it to be one of the ways that we communicate our thinking (past and present) to clients and the general public. We believe that investing is an iterative process and we know of no better way to test our own thinking than to share it with others. We encourage readers to send us their thoughts or questions.
Latest Investment Perspectives
Recession Playbook?
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so” – Mark Twain
Recent sentiment surveys indicate that more than 60% of Americans believe that our economy is on the cusp of recession, while magazine covers declare inflation to be dead. The barrage of news stories has prompted an interesting question from clients, “Do you have a recession playbook?” In this Investment Perspectives, we want to discuss the most prominent economic forces driving the recession talk while also explaining how these signals influence our thinking. We’re not saying a recession is out of the question, or that concern is unwarranted. Our main point is that recessions are normal and that we plan rather than react. We know that every growth cycle is followed by contraction, but without divine insight of its timing, this knowledge is of limited investment use. The state of the economy and the market cycle impact the size of our opportunity set but not the way we select securities. Simply said, there are fewer bargain opportunities late in the cycle than after a downturn. The length of this current cycle makes it easy to forget that recessions and market drawdowns are a normal part of a properly functioning market. Our goal is to maintain a diversified portfolio with a sensible amount of cash to take advantage of future opportunities. The phases of the cycle can impact our cash balances for a while, but we never lose sight of our objectives. In our experience, adjusting the asset mix expressly to time market events hurts long-term performance.
Investment Perspectives Library
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006