Alternate routes: The Fed’s moves and implications for stocks, bonds and beyond
Diversified, long-term investors face the ongoing task of assessing which asset classes and allocation strategies are most likely to put them on the road to successful portfolio outcomes. The path is typically neither static nor in a frenzied flux over long periods, but instead tends to wind through an evolving economic and market landscape shaped by cyclical and secular forces.
If neither purely traditional fixed income and cash at one extreme nor overly equity-centric approaches at the other are optimal portfolio strategies, where do we see the most compelling opportunities? Our “Five themes for 2025” below, cover our preferences and accompanying rationales.
- Relative yields and credit selection, more than risk-free rates, should 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 positive.
- The world may be decoupling; markets are not.
- Energy demand charges ahead of capacity, creating opportunities amid political changes.
