How much longer can the US expansion last? At 96 months, the current recovery is already one of the longest on record. Another year and a half and it will eclipse the mark set by the bellwether expansion of the 1990s. Still, based on the indicators we monitor most closely for recession risk, QMA now considers the odds of a downturn before the end of 2018 to be low.
As QMA’s Q4 2017 Outlook & Review discusses, this “To Be Continued” theme is part of the reason the Dynamic Asset Allocation team has a moderate overweight in stocks and other risky assets. The team has recently added exposure to value, financial and small-cap stocks, which it views as due for a catch-up in relative performance, particularly now that tax reform is back on the front burner.