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Investment Strategy Overview (ISO)

U.S. Trust's outlook on the economy, the markets, investment trends, portfolio considerations and asset-class weightings.

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Midyear Outlook: The Journey from the "Unnatural" State

Investors are on a long journey from an “unnatural” market environment to a more normal one. There are concerns that steps taken to normalize financial conditions could lead to instability if they’re not managed properly. We believe the journey will continue for the rest of the year and beyond. 

Low-cost funding is not new but its reach, duration, and overall impact have been much greater than in the past. This is why we believe its stabilizing effects could become destabilizing if they persist too long. This normalization “journey” is uncharted territory for investors.

Christopher Hyzy Chief Investment Officer

The Bull Market Has Been Wounded but We Expect Strength Is Around the Corner

Since this bull market is almost 10 years old and “information noise” is at sky-high levels through various social/media platforms more than ever before—it is natural to expect rolling concerns at this stage. We think the concerns are healthy to keep in mind the further we travel through the cycle but it may be too premature, at this point, to suggest the cycle is ending and a recession is around the corner in 2018. Economic growth is still gathering momentum as are corporate profits.

In bull market environments, market bottoms traditionally take a few months to occur. We believe we are currently in that process.

Christopher Hyzy Chief Investment Officer, U.S. Trust

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