“We are not renters of stocks. We are owners of companies.” – Ron Baron
As we discussed last week, we expect the changing markets to remain unsettled. Our investment researchers are cautious in the short term. Importantly, this level of caution is uncommon for us. We are long-term optimists, and you—and we—invest with that spirit. Change is difficult, and we are not yet done with changing times.
On the other hand, change is awesome. With a change in perspective, we can embrace these changes. On the other side of rising interest rates, we may have fixed income investments that potentially provide income—again—like the good old days. On the other side of inflation, we may have new products and services that do not yet exist—just like in the past. Inflation is often the birthplace of innovation. And the cliché goes something like this: the cure to higher prices, are higher prices.
From an investor’s standpoint, some of the best and most profitable companies to come out of Wall Street were started in tough economic times—either during a recession or depression. These names include:
- General Electric
- General Motors
- Hewlett Packard
- Hyatt Hotels
The list of Americans who do amazing things in tough times is infinite. As we talk about in our commentary, we do not make predictions. Our researchers do. And we believe that the right way to invest is to diversify by strategy.
Usually, after the election is over, equities resume their long-term, upward trajectory. And if we do face a recession, it is usually mild. And recessions often lead to amazing innovation.
For the first time since the great financial crisis of 2008, our researchers agree that the short-term is a little bearish. To get to the highlights, here are some shortcuts for you:
5 mins 10 seconds: 5 big factors driving markets today
11 minutes: 3 changes we have already made to many of our client portfolios
17 mins 15 seconds: Virginia Wu on when the best days in the markets tend to occur…
23 minutes: Chad Harmon on reasons for optimism
30 minutes: Judson on shrinkflation and what we can do about it