Slow & Steady... Outperforms in the Long Run
The human mind feels most comfortable when there is logic. Investors are no different. We need a narrative and a story. The markets get very anxious when there are too many unquantifiable events and no clear signs of a consistent narrative.
The fear and outright panic in global markets has been palpable, with price action in both stocks and bonds concluding that we must be going into a recession. A better and more meaningful place to look for logic as an investor is data. But what data does one look at?
As it turned out, 2018 was less about Goldilocks and more about the three little bears eating our proverbial lunch. The escalation of the US-China trade war, four US Federal Reserve rate increases, Brexit uncertainty and the EU-Italy budget skirmish – all of which took their toll on global stock markets and our portfolios in 2018.
The issue for investors has been that there is a dichotomy between what the financial markets are signaling, and what the economic data is signaling. As investors it is important to recognize that:
In the commentary, we touch on the following companies: