2022 will be a defining point in the current market cycle. The world is finally moving past the effects of covid and entering a normalization phase for economic growth and monetary policies. We are moving deeper into the middle of the cycle, and the removal of policy support will leave both the stock and bond markets on their own for the first time in years.

Our themes for this year include higher volatility, the Fed, inflation, and interest rates as the key drivers of both returns and risks. Be prepared for multiple rotations and shifts in market leadership as the global economy regains its footing and takes on the new growth and policy environment. When the path forward is uncertain we believe diversification should come in the form of both asset selection and management styles. Including a tactical style which can capitalize on short-term market opportunities will add value from both a return and risk management perspective this year.

To learn more about how we combine our macroeconomic, fundamental, and proprietary Newton AI research to construct portfolios that thrive in all market environments contact our investment team at 512-777-5900 or jchatmas@waterloocap.com