Market Trends & Outlook

As the Fed continues to push interest rates higher to combat inflation (today announcing a 0.75% increase), portfolio management teams and investment analysts from across Catalyst Funds and Rational Funds weigh in on what this means for investors:

As the Fed continues to push interest rates higher to combat inflation (today announcing a 0.75% increase), portfolio management teams and investment analysts from across Catalyst Funds and Rational Funds weigh in on what this means for investors:

A key mega trend our team is excited about is the migration of assets to alternative asset managers. Within the asset management industry, the alternatives category is growing fast and with significant room to expand. The "smart money," which includes foundations, endowments, pensions, sovereign wealth funds, and insurance companies, have been investing in private markets for decades and between 20-40% of their total portfolios are still invested in this category today. The high-net-worth and private wealth markets have been much slower to adopt the private markets, but meaningful asset growth has begun while still being only roughly 2-4% of a typical HNW portfolio. Although they should, I do not expect the retail market to begin allocating like the smartest institutions. However, from where we sit today, there is still meaningful growth ahead in this channel. A recent Evercore ISI report shows each incremental 1% allocation from the wealth management platforms would mean $100 billion of additional assets to alternative managers. That's powerful stuff.

The Fed’s next crisis is already brewing. Unlike 2008, where “subprime mortgages” froze counter-party trading in the credit markets as Lehman Brothers failed, in 2022, it might just be the $27 Trillion Treasury market.

There are a handful of investors that have risen above everyone else over time. Peter Lynch was one of the titans of investing. Peter ran the Fidelity Magellan Fund from May 1977 to April 1990. Over that period, the Magellan Fund was the top performing equity fund. His “invest in what you know” approach is quite similar to what we preach with the top global brands approach to investing.

“Recession Fatigue” is setting in as consumers struggle under rising interest rates, high inflation, and a declining stock market. Such was a point made in a recent CNBC article:

“Recession Fatigue” is setting in as consumers struggle under rising interest rates, high inflation, and a declining stock market. Such was a point made in a recent CNBC article:

Absolutely no one knows what will happen in the future. When you come across a person or firm that says they can predict the future, ask yourself why they aren't sitting on a 100-foot yacht in St. Barts versus talking to the media or you about their knowledge of the future.