By Mackenzie Investments | Jan. 6, 2021
Todd Mattina, Senior Vice-President, Chief Economist, Portfolio Manager and Co-Lead of the Mackenzie Multi-Asset Strategies Team, and Jules Boudreau, Economist with the Mackenzie Multi-Asset Strategies Team
How should investors navigate an unusually uncertain economic environment? Think long term. Todd Mattina, Senior Vice-President, Chief Economist, Portfolio Manager and Co-Lead of the Mackenzie Multi-Asset Strategies Team, and Jules Boudreau, Economist with the Mackenzie Multi-Asset Strategies Team, provide their insights on building a well-balanced asset mix. Their outlook for 2021 includes updated capital market assumptions across asset classes, an accompanying economic outlook for major regions and risk mitigation strategies that will help counter market volatility.
Key takeaways:
- Given the unusually uncertain economic outlook, it’s more important than ever for investors to hold a well-balanced asset mix to achieve their target return in the long term.
- Building well-balanced portfolios is key due to potentially lower stock-bond diversification, and diversifying equity risk will become increasingly important. As the pro-cyclical Canadian dollar typically trades with global stocks, unhedged foreign currency exposure can help reduce total risk.
- Capital markets are expected to deliver lower returns in the next 10 years compared to recent decades due to richly valued stock markets and fixed income yields remaining at historic lows.
- A strong rebound across major economies is expected in the second half of 2021 as mass vaccinations are completed. Downside economic risks will continue in the near term due to restrictions to contain the virus, a modestly sized U.S. fiscal stimulus and an overleveraged corporate sector.
Read the full report for detailed insights on capital markets and a global outlook by region.
The views expressed in this commentary are those of this fund manager as at the date of publication and are subject to change without notice. This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice. Prospective investors should review the offering documents relating to any investment carefully before making an investment decision and should ask their financial advisor for advice based on their specific circumstances. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. Unit values and investment returns will fluctuate.
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