The current U.S. economic cycle has been unusually long, sparking fears that it may die of old age. We have a different take. Looking at the quantity of recovery rather than the time it has taken reveals an economy with ample slack to power on. Its remaining lifespan may be clocked in years, not quarters.
If growth persists for some time and valuations on stocks are more reasonable than historical averages suggest, the biggest danger investor’s face may be a premature flight to safety. Indeed, we believe the old adage holds: make hay while the sun is shining. The global economy has settled into a steady growth rate slightly above the post-crisis trend. Investors may want to embrace the implications of a durable economic expansion and favor risk assets like stocks over bonds.
Stick to your guns in stocks. An earnings recovery is supporting equities globally