Valtrust Thought Series

2021: First Quarter Wrap Our 2020 Last Quarter wrap suggested a mantra for 2021: “don’t chase the market - let it come to you”. The volatility experienced by investors in the first quarter of 2021 gave plenty of heartburn, but also great investment opportunities for those who patiently bought at dips. We expect this trend to continue for the rest of the year… but do hope the volatility subsides in the 2nd quarter of 2021. The...

2020 has come to a close. To all our readers we hope you have crossed it without any long-lasting scars. While we begin 2021 with renewed optimism hoping 2021 puts the pandemic behind us, there is also a need for abundant caution. Ballooning budget deficits, inflationary pressures and market corrections driven by high valuations make our mantra for the year “don’t chase the market - let it come to you”. So let’s see where we...

Starting with the U.S.: Low interest rates for the next 2-3 years. The Federal Open Market Committee (FOMC) in its meeting in September signalled that the Fed will keep key interest rates near zero through 2023 – an addition of one more year to the previous guidance. The Fed will also continue to purchase $120 billion worth of Treasuries and mortgage-backed securities each month. The U.S. Federal Government has an annual $3+ trillion deficit and...

Starting with the U.S.: The Fed wants to (and is) keeping control… The last quarter was all about the Fed QE program, targeted to soften the impact of economic disruptions and to ensure US business would have sufficient liquidity. Closer to the end of the quarter the results started coming in. U.S. consumer confidence index was 85.9 in May and increased to 98.1 in June – a significant outperformance over the June expectation of 91.  Consumer...

Starting with the U.S.: A recession is on the cards… It is amazing how quickly the outlook has changed – the global economy is struggling and central banks are doing all they can to soften the landing. In times when the whole world is impacted, economies with a strong (pre-event) macro and available firepower will do better relative to the rest of the world. The U.S. comes in this category. To protect the economy from...