Investment Outlook

U.S. ECONOMY

Widespread vaccination should allow growth to surge later in 2021, precipitating a relatively fast rebound from a deep recession.

Federal debt will likely continue to grow sharply, threatening greater fiscal stress by the middle of the decade.

A more predictable trade policy from the incoming Biden administration and stronger international economic growth should push the U.S. dollar lower.

Earnings should rebound but overall U.S. equity returns may be constrained by high valuations.

Maintaining low short-term rates until the economy reaches “maximum employment” could lead to a steepening of the yield curve in 2021.

International equities should benefit from a falling dollar and lower valuations relative to the U.S.

With returns constrained in traditional asset classes, alternative assets can provide income, diversification and downside protection.

With exact timing of vaccines still in flux investors must be positioned for a fundamental shift in sentiment at nearly any moment.

Generating strong returns in the decade ahead will require a renewed commitment to basic investment principles.

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