Thoughts on recent global market volatility

In light of ongoing instability in financial markets around the world, we asked several members of our investment and wealth strategy teams to offer their views and guidance.

The videos below cover a wide range of topics, from what’s causing such wide market swings to how portfolio managers are working to take advantage of them. You’ll also learn about the long term implications of such recent events as the downgrade of U.S. government debt and hear what our economists think about the possibility that we will enter into a double-dip recession.

 

Reasons for recent volatility and how portfolio managers are taking advantage of it

The recent spate of volatility became more pronounced after Standard & Poor’s (S&P) lowered its rating on U.S. government debt from AAA to AA+ in August. However, the origin of this turbulence dates back much further. In this video, Capital Group Private Client Services global portfolio manager Gerald Du Manoir discusses what has contributed to investor unease and describes how it can create opportunities for long-term investors.

 

Why the S&P downgrade may have positive long-term implications

While some feared the S&P downgrade would have negative repercussions on the fixed-income markets, the opposite has been true. Treasuries have actually rallied, and most other bonds have also done well. Though the lowered rating is arguably an embarrassment for the U.S. government, fixed-income analyst Wesley Phoa says it may be a catalyst for bringing about positive change.

 

The odds of a double-dip recession

It’s clear that economic growth has slowed in recent months, but the debate continues about whether the U.S. is headed into another recession. In this video, economist Darrell R. Spence provides insights on this topic from our Capital Strategy Research team.

 

Global equities remain attractively priced

Despite the heightened ups and downs, investors with a long time horizon can find plenty of bargains in the current environment, according to global portfolio manager Gerald Du Manoir.

 

The outlook for interest rates and the case for bond investing

The Federal Reserve recently pledged to keep interest rates low until 2013. In this video, fixed-income analyst Wesley Phoa talks about the potential impact of this move and reminds investors why they should hold bonds in the first place. 

 

Concentrating on the micro-economic environment

Just about everything you hear in the news today relates to what’s driving global markets from a macro, big picture perspective. A better way to invest, however, is by focusing on the “micro” factors impacting individual companies, says global portfolio manager Gerald Du Manoir.

 

Despite low yields, bonds remain attractive from a historical perspective

It’s true that fixed-income interest rates are at or near record lows. But that doesn’t mean they’re not attractive, especially when viewed in a broader context. Fixed-income analyst Wesley Phoa explains.

 

The benefit of having a solid wealth strategy

Above all, it’s crucial to have the appropriate plan in place to weather any kind of market storm. Senior wealth advisory manager Michelle Black discusses the keys to putting together an effective wealth strategy plan.

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