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Short-term tactical outlook

Market Outlook Jan 2018

A snapshot of current views on equity, fixed-income and alternative asset classes — updated monthly to help you tactically adjust for opportunities and risks.

Overall positions

Equities

Fixed income

Alternatives

Cash

Key Takeaways

  • Perhaps the most helpful thing we said last year was “don’t overthink it.” At times, it was tempting to do just that and react to portfolio gains with a preservation instinct. But that instinct would have been wrong every time.
  • Our investment views remain positive. We’re early in the new year. And with the economy still expanding and the recent passage of a pro-business tax cut in the U.S., we’re giving the benefit of the doubt to the pro-risk market patterns that are still very much in place.
  • Remain fully invested. In all, a fully invested portfolio with an overweight to equity risk makes sense in the beginning of 2018.

Within equities

Within equities


Within fixed income

Within fixed income

Within alternatives

Within alternatives


Currency

Currency

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Jeffrey L. Knight

Global Head of Investment Solutions and Co-Head of Global Asset Allocation

Jeff Knight leads the Global Asset Allocation Team, a dedicated group of investment professionals who manage asset allocation portfolios. The team evaluates economic conditions, market opportunities and risks across the global landscape to determine asset allocation views.

Disclosures

Alternative investments involve substantial risks and are more volatile than traditional investments, making them more suitable for investors with an above-average tolerance for risk. Foreign investments subject the fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. There are risks associated with fixed-income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer term securities.

Diversification does not assure a profit or protect against loss.