The guide is a resource for financial advisers and investors to help break down the state of the markets and economy. It is also useful for investors to understand the drivers of recent market performance, as well as some of the issues which will impact returns going forward.
Entering 2013, financial markets faced significant challenges including a slumping European economy, concerns about inflation in some emerging markets and fiscal drag in the U.S. from tax increases and spending cuts.
Despite this, equity markets had a remarkably strong quarter, with major stock market indices hitting all-time highs in a full recovery from the 2007-2009 bear market. Fixed-income markets, however, saw more mixed performance as investors moved cash toward risk assets.
This quarter’s guide addresses topics such as:
- How a surge in household wealth is offsetting some of the impacts of fiscal drag;
- Potential stock market returns starting from higher valuations ;
- Implications of Federal Reserve policy for inflation, bonds and equities;
- The contrast between aggressive fiscal and monetary stimulus in Japan and austerity in Europe; and
- Risks and opportunities in emerging markets.
The guide is available here.