Based on the continuing market volatility, I thought that you might find market perspectives from various economists and portfolio managers employed by the Capital Group to be encouraging.
(Many of you will recognize the name of the Capital Group’s subsidiary – The American Funds.) Founded in Los Angeles, California in 1931, the Capital Group ranks among the world’s oldest and largest investment management organizations. It has more than $1.7 trillion in assets under management and has offices around the globe in the Americas, Asia, Australia and Europe. (Source: Wikipedia) Robert Lind, the company’s European economist says, “There is mounting evidence that near-term momentum is building in the global economy and the cycle appears to be self-sustaining, particularly with respect to Europe. The synchronization of global growth has raised the possibility that the cycle can be stronger for longer.”
Led by portfolio manager Hilda Applbaum, the comments on the American economy are:
“With consumer spending healthy and wages rising, consumer -facing businesses have the potential to do well in the next phase of the economic expansion. Companies across a wide variety of industries are exposed to rising consumption, including home-improvement and online retailers. Additionally, the potential for credit growth driven by solid consumer fundamentals, and the prospect of rising interest rates, could help drive profit growth for banks.”
Another portfolio manager, Mark Denning shares these thoughts about Europe: “Thanks to improving global growth, select European companies are thriving-particularly those that operate on a global stage. The so-called “Internet of Things” investment theme is alive and well in Europe, powered in part by Dutch technological innovation. We also see significant buying opportunity in the financial sector.”
Moving on to emerging markets… Portfolio manager Chris Thomsen states, “and improving global economy and dollar weakness can be tailwinds for companies in a broad range of industries, from information technology to consumer goods to financials and commodities exporters. Look for growth in the technology sector to be driven further by demand for handheld electronic devices and mobile – focused services among the large populace of China and India.”
While I know it’s easy to be concerned, please remember to “tune out the noise” and stay focused on the longer term. For those of you who are taking income, please remember that we already have positioned your portfolio to reach that goal. Therefore, many of your assets are not in the stock market anyway. Then we have many of you protected with the lifetime guaranteed income from various annuities….
Source: Capital Group, Outlook, January 2018, Lit # MFCPBR-071-021 8P
As always, we’re here if anyone wants to talk.
Barbara A. Culver
CFP®, ChFC®, CLU, AEP®