Tactical Investment Strategy, August 2021

August 17, 2021 — Late summer has historically been a challenging period for risk markets, and this year looks set to follow that pattern –with an abundance of headline risk around spiking Delta variant cases, the China tech crackdown, and chaos in Afghanistan. So far, equities have been resilient to these risks, but we would not be surprised if markets consolidate 5% to 10% sometime before the fall. Despite these concerns, our overall macro view is still positive given favorable monetary policy and growth and earnings dynamics. As such, we remain constructive toward risk assets and higher-yielding fixed income over the medium term.