Market Compass

Investment Guide

The guide provides clear, compelling charts illustrating three market trends that matter to investors' portfolios - disruption, divergence, and demographics and debt.

Disruption

  • Disruption is all around us, from monetary policy disruption to geopolitical disruption to innovation-driven disruption.
  • A shifting world order has made some institutions vulnerable, and has caused a trend towards de-globalization.
  • The Fed is in uncharted territory as it attempts to unwind experimental monetary policy.

Divergence

  • The global economic environment was synchronized in 2017 but saw divergence in 2018, which is likely to continue.
  • There are differences within the US; some policies are supportive of growth and some are likely to depress growth.
  • There is significant divergence in valuations among different countries and regions.

Demographics and debt

  • Ultra low rates encouraged the world to take on more debt when it should have been deleveraging.
  • As a result, many countries, companies and households are under a significant debt burden.
  • Debt is likely to continue to grow and become more difficult to service, especially as rates rise.