David Darst, Senior Analyst and Investment Strategist at The Family Office, shared some investment insights on key issues that influence portfolio composition, asset allocation, and investment strategy.
Inflation has been moderating lately, dropping from 6% to 5.2%, while the Personal Consumption Expenditures Index, the preferred inflation measure of the Federal Reserve (the “Fed”), was 4.4%. Markets have responded well, as stocks and bonds increased. Oil dropped 36% from its high last year. The US dollar is also moderating, following a weak year due to inflationary influences. Finally, the Fed is presenting less hawkish, assertive, and aggressive rhetoric in terms of tightening monetary policy.
Labor costs have dropped but not as much as the cost of some goods. Core services inflation is still elevated whereas core goods inflation has decreased noticeably. 59 of the total components of the Consumer Price Index are in deflation. House prices begin to transform slowly into rent and owners’ equivalent rent.
Investors with cash reserves may want to start investing. If they wait until July or August when inflation numbers decrease, the price of bonds and stocks will rise as interest rates decrease.
The direction of labor inflation will become clearer in the coming months, noting that the current situation does not resemble the 1970s and 1980s.
Three to four factors have been helping the economy: the drop in the dollar, the reopening in China and the less hawkish rhetoric of the Fed. Other factors have caused concern such as the drop in retail sales at the end of last year; the contraction in the ISM Manufacturing and ISM Services indices, and the inverted yield curve.
The leading economic indicators have been declining for seven or eight months in a row which might lead to an earnings recession as soft demand affects inventories, imports and exports negatively.
Private equity is still recommended for growth and structured private credit for yield, in addition to some private real estate. Manager selection remains critical, especially for investors in the alternative space.
Caution is advised for equities in emerging markets, Europe and the US. Look for companies with exposure to the growth and opening in China. Investors should buy based on dollar cost averaging.
This presentation is provided to you by The Family Office Co. BSC(c) (“The Family Office”) for informational purposes only, and contains proprietary information that may not be reproduced, distributed to, or used by, any third parties without The Family Office’s prior written consent.
All information, figures, calculations, graphs and other numerical representations appearing in this presentation have not been audited and may be subject to change over time. Furthermore, certain valuations (including valuations of investments) appearing in this presentation are subject to change as they may be based on either estimates or historical figures that do not reflect the latest valuation. Although all information and opinions expressed in this presentation were obtained from sources believed to be reliable and in good faith, no representation or warranty, express or implied, is made as to their accuracy or completeness. The information contained herein is not a substitute for a thorough due diligence investigation. Past performance is not indicative of and does not guarantee future performance. Exit timelines, prices and related projections are estimates only, and exits could happen sooner or later than expected, or at a higher or lower valuation than expected, and are conditional, among other things, on certain assumptions and future performance relating to the financial and operational health of each business and macroeconomic conditions.
The Family Office makes no representation or warranty, express or implied, with respect to any statistics or historical or current financial data, whether created by The Family Office through its own research or quoted from other sources. With respect to any such statistics or data delivered or made available by or on behalf of The Family Office, it is acknowledged that (a) the investor takes full responsibility for making its own evaluation of the materiality of the information and the integrity of the quoted source and (b) the investor has no claim against The Family Office.
Amounts in currencies other than the US Dollar are translated using prevailing market rates as calculated by The Family Office or its service providers and may differ from the rates used by banks. The rates are indicative only and do not reflect the rates at which The Family Office would be prepared to enter into any transactions with other parties.
Certain information contained in this presentation constitutes “forward-looking statements,” which can be identified by the use of words such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “plans,” “estimates,” “intend,” “continue,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. To the extent this presentation contains any forecasts, projections, goals, plans and other forward-looking statements, such forward-looking statements are inherently subject to, known and unknown, significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond The Family Office’s control and may cause actual performance, financial results and other projections in the future to differ materially from any projections of future performance, results or achievements expressed or implied by such forward-looking statements. Investors should not place undue reliance on these forward-looking statements. The Family Office undertakes no obligation to update any forward-looking statements to conform to actual results or changes in The Family Office’s expectations, unless required by applicable law.
The Family Office makes no representation or warranty, express or implied, with respect to any financial projection or forecast. With respect to any such projection or forecast delivered or made available by or on behalf of The Family office, it is acknowledged that (a) there are uncertainties inherent in attempting to make such projections and forecasts, (b) the investor is familiar with such uncertainties, (c) the investor takes full responsibility for making its own evaluation of the adequacy and accuracy of all such projections and forecasts so furnished to it and (d) the investor has no claim against The Family Office.
This presentation represents a summary of certain information, the full terms of which are contained in a Private Placement Memorandum that should be reviewed for a more complete understanding of the investments and their risks. In addition, this presentation does not constitute an offer to sell, or a solicitation to buy, any instrument or other financial product, nor does it amount to a commitment by The Family Office to make such an offer at present or an indication of The Family Office’s willingness to make such an offer in the future.
The Family Office is a Category 1 Investment Firm regulated by the Central Bank of Bahrain C.R.No.53871 dated 21/6/2004. Paid Up Capital: US$10,000,000. The Family Office only offers products and services to ‘accredited investors’ as defined by the Central Bank of Bahrain.
Talk to our investment professionals or explore our digital platform without any obligations