We have spent most of 2022 in Stagflation with growth slowing, inflation rising and only commodities doing well. We're expecting to move into disinflationary Reflation in 2023 with bonds doing better again.
Chart 2: Average historic returns in business cycle phases
Past performance isn’t a reliable indicator of future results. Source: RLAM. For illustrative purposes only. Data based on an analysis of business cycles from April 1973 to June 2022. Figures are shown in real terms.
Other models
In addition to the Investment Clock model, we have a number of other robust models which we use to guide our tactical asset allocation decisions. These quantitative models are used in conjunction with the judgement from our team to provide a resilient, repeatable process to add value to our portfolios over time.
How all of this helps give you peace of mind
In the challenging environment ahead, active management can not only help clients navigate around poor decisions (versus passive investors that just follow the benchmark), but also seek to add incremental value over time as market opportunities arise. This gives you and your clients the comfort of a tried and tested active process that is continuously adapting as conditions change. An important factor in these volatile times.
