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Wells Fargo: 10-year economic expansion not over, all avenues require careful assessment
Other - JUNE 18, 2019

Wells Fargo: 10-year economic expansion not over, all avenues require careful assessment

by Released

The current 10-year economic expansion is not over, and all avenues for investors to consider will require careful assessment, according to the “2019 Midyear Outlook Eyes Forward: Opportunities and Challenges” report by Wells Fargo Investment Institute (WFII).

“The theme we adopted at the beginning of 2019, ‘the end of easy,’ still resonates,” said Darrell Cronk, president of WFII and chief investment officer of wealth and investment management at Wells Fargo. “The first half of 2019 has delivered exceptionally strong capital market returns across most major asset classes. However, there are risks for investors to keep an eye on such as a meaningful yield-curve inversion, continued volatility in equity markets, and heightened geopolitical tensions.”

Paul Christopher, head of global market strategy for WFII, said, “Since early 2018, investor concerns have focused mostly on political uncertainties, and we view these as the main economic risk. Whether we are looking at Brexit or drawn-out trade negotiations, these geopolitical elements can deepen pressure on business confidence here in the United States.”

 

To help investors maintain a forward focus, “they should consider rebalancing their portfolios to increase diversification and exposure toward areas of economic growth and where valuations remain attractive,” added Christopher.

The report outlines five strategies for investors to consider in the second half of 2019:

  1. Rebalance when volatility strikes.
  2. Potentially reduce price volatility with income-generating assets.
  3. Use cash to your advantage.
  4. Consider greater exposure to emerging market equities and sectors with higher quality earnings.
  5. Add strategies that can benefit from various market conditions.
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