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2018 Genus Quarterly Review Q4

The economy’s sensitivity to higher debt levels are putting a cap on the Fed’s ability to increase interest rates. In addition, the December market correction, coupled with lower interest rates have improved equity market valuations. We believe lower interest rates and improved valuations will help extend the economic cycle. Because of this, we have increased our bond exposure, particularly in the government side. Throughout last year, we saw political tensions dominate headlines and we expect see more of this in the upcoming year. The biggest question mark in the global economy is the US China trade tensions, but both sides have incentives to come out with a deal by the deadline. With this uncertainty, equity markets continue to be range bound and we will maintain a cautious investment approach.