Heightened emerging market and European risks underscore importance of diversification

Here's what we're thinking

Written by Nitin Manohar
June 5, 2018

The beginning of July coincides with the onset of the ‘dog days of summer’. The expression was used by the ancient Romans to describe hot and humid days associated with heat radiating from the Dog Star, which appeared to rise and set alongside the sun during July. While recent geopolitical developments in Italy and Spain could make investors sweat a little more during the next few months, we believe the risk of the Eurozone being fractured by populism is low, difficult to time and best managed through diversification. We continue to believe that equities will outperform fixed income securities as central bank policy changes in developed markets are commensurate with moderate and gradual increases in inflation.

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