Round portfolios are currently 'Risk Off.'
What Risk Off means.
We want to simplify our investment outlook for you. Round portfolios are complex and dynamic, but on a top-level, they can be boiled down to two overarching concepts: Risk Off and Risk On.
Risk Off means that the portfolios are positioned away from riskier areas when it's just not worth taking on the additional risk. Risk On means that the portfolios have repositioned to take on additional risk.
As your long term investment partner, we help navigate the markets for you, so you don't have to worry about trying to time the market.
Market update: China
China has been at the center of all the market news recently. With Phase 1 of the US-China trade deal being signed, the markets responded positively.
The more recent news that has been causing market concerns is the Coronavirus. It has weakened the Chinese Yuan after flights were suspended to and from China, and investors have flocked to safe-haven investments.
Investors have started to fear the economic impact of companies temporarily closing operations within China, which could lead to slower worldwide economic growth. The repercussions of this may be a sell-off in risk assets such as stocks and high-yield bonds. We've seen the S&P 500 turned negative for 2020 with this recent uncertainty.
There may be a silver lining, however. Epidemics are generally short-lived and do not derail long term economic growth. At Round, we are closely monitoring the markets and what fund managers are saying in response to the epidemic.
What else is going on?
- Hedge funds just sold growth stocks at the fastest pace in more than a year, as valuations haven’t been this high since the dot-com bubble in 2000.
- Britain will officially complete its move to leave the European Union today four years after voting to do so. The next step in the process is to negotiate new trade deals with the EU and the United States.
- GDP: 2019 GDP growth was 2.3%, slowest pace since 2016.
- Interest Rates: The US Federal Reserve kept rates unchanged for the second time in a row.
- Employment: The unemployment rate remains near half-century lows, and the pace of job additions remains solid.
- Consumer: With a healthy job market, rising incomes, and upbeat consumer confidence, the fundamentals supporting household spending are solid.
- Business: Business investment and exports remain weak, and manufacturing output has declined over the past year.
While we will be releasing a deeper dive into our market outlook soon, here is a quick take for our market outlook:
-Our objective is to provide stable returns through market volatility
-Portfolios have moved up in credit quality
-Equity exposure has been reduced
-The Round Team