Global Multi-Asset: Full Valuations Suggest Cautious Approach to Portfolio RiskGlobal Multi-Asset: Full Valuations Suggest Cautious Approach to Portfolio Risk
Growth should support profits in 2018, but equity valuations are full. Bonds could play an important diversification role.
January 10, 2018
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Broadening global growth should be supportive for profits in 2018, but our equity positioning is tempered by full valuations. Among developed equity markets, Europe and Japan appear more attractive than the U.S. While equity valuations in the emerging markets are modestly above historical averages, they appear less expensive compared with developed markets. Our relative preference for bonds does not imply a bullish outlook for fixed income assets. However, bonds can play an important role as portfolio diversifiers should we face geopolitical headwinds or if growth disappoints.
