Are Investors Becoming Complacent?

Risk assets have continued their rally in 2021 as investors discount an end to the pandemic and a surge in global economic growth. Valuations across traditional stocks and bonds remain elevated. More complex segments of the financial markets, including crypto-currencies and SPACs are being inflated by speculation and social media momentum. Are investors becoming complacent?

Is Cash King?

The Federal Reserve raised interest rates 5.25% over the last two years – an abrupt shift from previous zero-interest rate policy. Yields above 5% have attracted investors to money market funds as total assets grew ~20% in 2023 to more than $6 trillion. While holding more cash may help ease investors’ concerns around short-term volatility, holding too much cash may actually increase the probability that a portfolio falls short of its long-term goals and objectives.

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Japan - Can the Recent Equity Rally Continue?

Japan has been a tough market for investors – with uneven historic GDP growth, deflation and low corporate productivity. Prior government policies (Abenomics) and recent initiatives by the exchanges are starting to show tangible progress. Given the strong performance in 2023, how should investors think about Japanese stocks going forward?

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Is China’s Manufacturing Dominance Coming to an End?

Over the last few decades, China has achieved its longstanding goal of becoming the “world’s factory” with key drivers such as low labor costs and rapid supply chain infrastructure development.  However, government policy, and rising geopolitical tensions pose potential headwinds to China’s manufacturing dominance. ACG discusses what led to China’s dominance, what has changed, potential beneficiaries, unintended consequences, and investment implications.

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Where's the Recession?

Investors have been anticipating a recession for some time now, but the labor market has remained strong and investment returns have been solid. Data and history provide insight on the future of the economy and markets, but the magnitude and timing of each cycle is very difficult to predict. ACG examines some of the key themes investors should be paying attention to.

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