Our views on fundamentals:
- The economic cycle continues, but the risks are intensifying.
- Unemployment continues to fall, which should drive up wages.
- Inflation should rise gradually.
- The global economy is growing everywhere but booming nowhere.
Our views on markets:
- International and emerging market equities will likely outperform the U.S.
- Given their lower P/E multiples, domestic large cap value will likely perform similarly to domestic large cap growth going forward.
- We believe value stocks will outperform at the onset of the next recession and into the subsequent recovery.
- The U.S. dollar will likely weaken as inflation gradually rises in the U.S.
Acumen Wealth Advisors’ investment approach continues to focus on diversified portfolios for risk mitigation. We do have a favorable outlook on international equities which has historically been considered riskier assets. Risk should only be incurred when a commensurate amount of reward is anticipated. If you look at valuations, they suggest international equity markets are cheaper than U.S. equities. Unlike last year, U.S. equities, particularly growth equities, have done better than their international counterparts. This difference is primarily due to stronger growth in the United States than we’ve seen overseas, and some stabilization in the U.S. dollar. But, in the long run, we think the dollar will decline and will amplify the return in international equities. We also believe U.S. economic and earnings growth will slow over the next few years while it could increase more quickly overseas.
The opinions expressed in this commentary should not be considered as fact. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. This information has been prepared from sources believed reliable but the accuracy and completeness of the information cannot be guaranteed. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results. Diversification does not protect against loss of principal.
Acumen Wealth Advisors, LLC® is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.