Filter the noise, find the opportunity
“Noise,” wrote 19th century philosopher Arthur Schopenhauer, “is the most impertinent of all interruptions.” Investing has changed a lot since Schopenhauer railed against noise, but economies and markets are as noisy as ever. Success in this environment requires filtering out the noise to identify the most compelling investment opportunities. To help cut through the clamor, we offer the following five portfolio themes. Some are unchanged from our previous outlook; others provide new perspective on evolving market dynamics.
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 in it for the duration.
- Real estate reality: the trends are favorable.
- The world may be decoupling; markets are not.
- Energy demand charges ahead of capacity, creating opportunities amid political changes.
