Capital Insights

One of the largest money managers in the world is Capital Group, a global investment firm based out of Los Angeles that manages over US$2 trillion for investors around the world. Capital Group is recognized for having an extensive research team who contribute high conviction investment ideas alongside a group of experienced portfolio managers. Each year they publish an excellent report, Outlook - Long-term perspective on markets and economies. 

Highlights in this year’s report:

• A return to higher interest rates – if you go back all the way to 1870, US long-term interest rates, which currently sit at under 4% for the US Treasury bond are within the range of historical norms (3% to 6%)
• There have been mini-recessions and recoveries in different industry sectors (think travel during the Pandemic and post-Pandemic) meaning the US may “avoid the most widely predicted recession in history”
• Corporate earnings should rebound in 2024
• Investment returns from bonds and stocks have historically outpaced cash returns once central banks finish raising rates
• 2024 is an election year in the US and long-terms returns post-election have averaged over 10% whether a Democrat or Republican takes the White House
• Out-of-favour dividend payers poised to offer diversification and income

Best wishes for a happy and healthy new year!

Brad