Wheels down, elevation up: Five themes for a new economic landing
Investors will feel tension between countervailing forces in the coming year: slipstreams that help move the economy and markets forward, and crosswinds making it more difficult to land smoothly. The key is not to let fear of flying prevent you from reaching your destination, but rather to be prepared for risks and alert to opportunities.
Here are the five key portfolio construction themes we see on our radar:
- Relative spreads and credit selection, not risk-free rates, will drive returns in public and private debt markets.
- Municipals are still the borrower of choice for investors who are in it for the duration.
- Real estate reality: it’s at a turning point.
- Energy demand charges ahead of capacity, creating opportunities amid political changes.
- Small caps are suiting up for the big leagues
