For the past seven years, explained Charles Gaffney, Equity Portfolio Manager at Eaton Vance, equity markets have been nothing short of exceptional. A consistent combination of strong stock returns, relatively low volatility, and a periodic dose of monetary medicine has kept the bears comfortably sleeping. In fact, points out the expert, history suggests this may be one of the best bull market runs on record with seven consecutive years of positive returns in the S&P 500 index.
However, 2016 has gotten off to a rough start with the market down nearly 9% at its lowest point, representing one of the worst starts in recent history. An analysis of economic data arguably suggests the global economy is facing some headwinds, including a slowdown in China, heightened volatility in energy markets, slower growth, and a cautious consumer. As a result, investors should be prepared for increased volatility throughout the year, said Gaffney.
“In this environment, establishing a high-quality, modestly conservative equity approach that can withstand the potential of heightened market volatility while seeking to protect the gains of previous years is a good starting point worth consideration”, resume the Portfolio Manager at Eaton Vance.
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