Matt McLennan was recently interviewed for Barron’s Magazine.
As long-term investors, we think it is important to take the right message from the strong broad market returns in 2020. As we’ve often cautioned, extrapolating trends is a risky way to commit capital, particularly when these trends reflect an extraordinary operating environment like that in 2020.
The reflation trade that emerged in late 2020 persistedthrough the first quarter of 2021. A relatively steadyvaccine rollout in the US combined with a steadfastlyaccommodative Federal Reserve and ongoing fiscal support had investors hopeful of strong economic growth in 2021, to the benefit of economically sensitive stocks.
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Though the economic and financial market dislocations from the outbreak of Covid-19 in early 2020 brought a quick end to the longest-running bull market in US history, the massive injection of mone
While the initial rebound in equity markets following the Covid-19 outbreak was sparked by massive policy intervention, the reflation leg of the new bull market appears to have been driven by expec
While there were a range of fundamental factors—including corporate debt vulnerabilities and continued geopolitical tensions—to suggest the credit cycle was in a mature state heading into 2020, the
Though 2020 was a generationally poor period for value indexes relative to growth, hopes that the worst of the Covid-19 recession was behind us helped fuel a fourth quarter rebound in the mature, p
Although 2020 ended with the Covid-19 pandemic surging and the economic recovery from recession still far from complete, investment markets nonetheless maintained a state of exuberance that was not necessarily rational.
While equity markets continued their rebound from the depths of the Covid-19 selloff, leadership shifted as signs of a “reflation” trade that emerged in September persisted.
After clawing back its losses from the Covid-19 selloff throughout much of the second and third quarters, the high yield market moved solidly into positive territory for the year during the fourth quarter.
Those who think it’s possible to predict the future of economies and markets with any sort of accuracy would have a hard time explaining 2020—a year dominated by a black swan event that descended u
The price of gold has risen considerably over the past two years as real interest rates—to which the price of gold has historically been inversely related—have cratered.
While growth has outperformed value significantly since the global financial crisis, the two styles have traded leadership in recent decades and value has dominated over the long term.
Investors in search of a dependable income stream traditionally have looked to bonds and other fixed income assets for their consistent coupon payments and relatively low volatility.
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