Wells Fargo issued the following announcement on Dec. 3.
Wells Fargo Investment Institute (WFII) today released its “2020 Outlook: A Call for Resilience,” which provides an in-depth analysis of economic and market forecasts, including commentary about the global economy, equities, fixed income, real assets, alternative investments and portfolio implementation actions.
“While this year was largely characterized by a tug-of-war between substantial geopolitical drags and offsetting global monetary policy easing, ironically all equity asset classes, and even several fixed income asset classes, have delivered double-digit returns, despite these concerns,” said Darrell Cronk, president of WFII and chief investment officer of Wells Fargo Wealth & Investment Management. “For now, we remain comfortable that the expansion can again weather this storm, even while traditional late-cycle signals abound.”
The report suggests three factors that are necessary for the global economy to stay resilient:
Consumer spending must remain solid.
Credit spreads (fixed income) must remain well-behaved.
China-U.S. trade dispute needs to de-escalate.
“Investors can instill resilience in their portfolios during this tricky part of the economic cycle by wisely positioning exposure to risk assets,” Cronk said. “Strong performance across equities, fixed income and real assets affords investors a unique and timely opportunity to ensure that position and exposure reflect the right risk/reward.”
The outlook provides five ways investors can pivot away from higher-risk asset classes:
Cash has an important place in a portfolio.
Focus on quality.
Go beyond traditional fixed income for yield.
Defense can be a good offense.
Focus on longer-term diversification, as shorter periods are likely to be volatile.
In addition, WFII’s focus themes for 2020 are Environmental, Social and Governance (ESG) Investing and a recurring series guide to the 2020 Elections.
Download “2020 Outlook: A Call for Resilience” and watch a video with strategists discussing what they think the biggest investment news stories will be in 2020.
Join the WFII 2020 Outlook webcast and conference call on Tuesday, Dec. 10, at 4 p.m. Eastern time. The number is 855-458-0619.
Original source can be found here.
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