GROWTH STOCK VALUATIONS HAVE SIGNIFICANTLY COMPRESSED
Equity valuations have reset for growth stocks, making now a potentially good entry point for long-term investors.
Investors can use tax loss harvesting strategies to help turn market drawdowns into an opportunity to reduce tax burdens.
Staying invested after yield curve inversion may pay off as there is typically more upside in equity markets with lead time before recessions begin.
Equity markets offer upside potential after yield curve inverts, and increasing exposure to growth stocks may provide a boost to portfolio returns.
The hypothetical Real Assets Portfolio is represented by an equal allocation (rebalanced annually) to these indexes: Bloomberg Commodity Index (commodities), Natural Resources—from 5/1998 to 10/2002, the S&P North American Natural Resources TR Index from 11/2002 to 3/2019, the S&P Global Natural Resources (Net) Index (natural resources), Global Infrastructure—from 5/1998 to 10/2001, the S&P 500 Utilities Sector Index from 11/2001 to 3/2019, the S&P Global Infrastructure Index (infrastructure), FTSE NAREIT U.S. REIT Index (U.S. real estate), FTSE EPRA/NAREIT Developed Ex US Index (non-U.S. developed real estate), London Bullion Market Association (LBMA) Gold Price Index (gold), Bloomberg U.S. TIPS Index (U.S. TIPS), and Alerian MLP Index (MLPs). The indexes used to represent real assets are for illustrative purposes only. Average annual index returns do not include the effects of sales charges or operating expenses. If they had, these returns would have been lower. The 60/40 Portfolio is represented by a 60% allocation to the S&P 500 Index (stocks) and a 40% allocation to the Bloomberg U.S. Aggregate Bond Index (bonds), rebalanced annually. All of these indexes are unmanaged. An investment cannot be made directly in an index. Past performance does not guarantee future results. The Real Assets and 60/40 Portfolios used herein are hypothetical and for illustrative purposes only.
Definitions and Indices: S&P 500 Index is a weighted index of 500 U.S. stocks providing a broad indicator of price movement. Bloomberg U.S. Aggregate Bond Index covers the U.S. dollar-denominated, investment-grade, fixed rate, taxable bond market of Securities and Exchange Commission (SEC)-registered securities. Bloomberg U.S. TIPS Index includes all publicly issued, U.S. Treasury inflation-protected securities that have at least one year remaining to maturity, are rated investment grade, and have $250 million or more of outstanding face value. S&P GSCI Index is a world-production-weighted index composed of 24 commodity futures contracts. S&P Global Infrastructure Index is an unmanaged index that consists of 75 companies from around the world that represent the listed infrastructure universe. To create diversified exposure across the global listed infrastructure market, the index has balanced weights across three distinct infrastructure clusters: utilities, transportation, and energy. S&P Developed ex-U.S. Property Index measures the investable universe of publicly traded real estate companies domiciled in developed countries outside of the U.S. S&P Global Natural Resources Index includes funds that invest primarily in the equity securities of domestic and foreign companies engaged in natural resources. FTSE NAREIT U.S. REIT Index measures the performance of all real estate investment trusts listed on the New York Stock Exchange, NASDAQ National Market, and American Stock Exchange. London Bullion Market Association Gold Price Index measures the price of gold. It is fixed twice daily in London by the five members of the London gold pool and all members of the London Bullion Market Association. Alerian MLP Index is an unmanaged index composite of the 50 most prominent energy master limited partnerships (MLPs) that provides investors with an unbiased, comprehensive benchmark for this emerging asset class. The index is calculated using a float-adjusted, capitalization-weighted methodology. All of these indexes are unmanaged. An investment cannot be made directly in an index.
Investing involves risks. Some investments are riskier than others. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost. Diversification and asset allocation do not guarantee profit or protect against loss.
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