Stocks continued to advance, shaking off the bear market of 2022, as several potential market disruptions failed to materialize. Unexpected global banking sector issues, including the second largest bank failure in U.S. history, were quickly dealt with by U.S. and European regulators, stemming off a major credit crunch.
The Treasury yield curve remains persistently inverted, implying that short-term bonds offer higher expected returns than intermediate- or long-term bonds. Given this information, does it make sense for intermediate-term bond investors to seek those higher returns by shortening the duration of their bond portfolios?
Softening inflation, a budding banking crisis, and a strong overall economic picture caused investors to re-evaluate their expectations for future interest rates in the first quarter. As a result, many of 2022’s trends – of lower asset prices in general, investor preferences for value stocks over growth stocks, and the
Sellwood’s 2023 Capital Market Assumptions represent our best current thinking about future returns. They are the essential building blocks of the asset allocation work we perform for clients.
The dozen years following the 2008-09 Global Financial Crisis can be separated into two distinct market narratives, both of which are currently being unwritten.
