Taking stock of regional performance



U.S. Stock Markets Dominance and AI The US stock market has notably higher exposure to what is viewed as the forefront of AI development. This exposure to hardware suppliers and software innovators has powered the U.S. markets to a firm year-to-date lead over all other global regions. While we agree that this technological leap holds immense potential, we’ve seen that it is often a very long (and winding) road to these waves of productivity gains from emerging technologies. On review of historical market cycles, we know that the behavioral same forces driving an over allocation to certain stocks can also work in the opposite direction.



Diversification: Facing the unknown Diversifying your investment portfolio across various asset classes and sectors means always owning some underperforming assets. This necessary tradeoff serves as your hedge against volatility, creating a portfolio that can withstand market shifts and reduce the risk of significant losses due to overconcentration in one sector.

The Economic Outlook The financial returns we expect in the next 12 months are not surprisingly tied to the fate of the U.S. economy. In the event of a ‘soft landing’, we could see equity prices continue to appreciate. However, recent increases to interest rates along with substantially higher bond yields may put a damper on consumer spending and thus are something we will closely monitor.

The Plan for Bonds After over a decade of historically low bond yields, we are seeing low-risk investments that meet or exceed our financial planning targets. The rise in bond yields presents a unique opportunity for investors to reconsider low-risk avenues to create income that aligns to their long-term financial plans.

See our full report: Global Insight

Stay tuned for more insights and happy investing!