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BUILDING INVESTOR RESILIENCE IN A DOWNTURN

With the U.S. economy firmly in late cycle, investors are concerned. How can they ensure their portfolios survive the short term so they can thrive in the long term? The answer would be fairly straightforward if recessions were all alike and had a predictable impact across markets—but they’re not, and they don’t.

We can’t predict how the next recession will unfold, but we can provide a framework to help investors prepare for the late-cycle risks most relevant to their investment needs and objectives. This article:

  • Looks back at a range of developed market recession experiences over the past four decades and the resulting sequence of market reactions for each
  • Looks ahead at four plausible downturn scenarios and assesses potential market responses
  • Analyzes the likely impact of these scenarios and market responses for different types of investors

The good news is, in general, we see investors as somewhat more resilient than in the past.  They are taking steps to diversify portfolios, structure them to their specific needs and incorporate asset allocation solutions. But concerns remain. For institutions, more sophisticated investment strategies can mitigate some risks while introducing or amplifying others. And ensuring that individuals save enough and are appropriately invested remains a key challenge as responsibility for retirement saving and investing decisions continues to shift from institutions to individuals.

Is your portfolio ready to bounce back from the next downturn?


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IS YOUR PORTFOLIO FIT TO CLEAR LATE-CYCLE HURDLES?

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Take a deep dive into issues likely to have a profound and protracted impact on the global investment landscape.

 
 

2019 Long-Term Capital Market Assumptions

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