Jim McDonald, Chief Investment Strategist, Northern Trust discusses his views on what advisors can expect over the next five years, including COVID-19’s longterm impact on global growth trends, interest rates and values-based investing.
Over the last decade, equity markets have enjoyed unprecedented growth. In 2019 alone, the S&P surged nearly 30%, outperforming many market forecasts. Today, markets have seemingly rebounded from the COVID-19 related drop earlier in 2020, but McDonald predicts that we’re not out of the woods yet. Once the trillions of stimulus dollars fade, McDonald says that economic challenges surrounding COVID-19 will force companies to think about “stability over profitability,” which will ultimately suppress global growth trajectories. The massive federal stimulus package, designed to keep the economy pumping, may result in persistently low interest rates, keeping inflation low. McDonald also speaks on the evolution of capitalism and values based investing.
In terms of finding income, traditional fixed income spaces are predicted to yield low but positive returns. For investors seeking alpha through alternative investing, McDonald highlights the private equity and infrastructure sector but emphasizes the importance of manager selection as performance can vary widely.
Jim McDonald is an executive vice president and the chief investment strategist for Northern Trust. He is responsible for overseeing the strategic and tactical asset allocation policy for our institutional and wealth management clients globally. He chairs the Northern Trust Tactical Asset Allocation Committee and is a co-portfolio manager of the Northern Global Tactical Asset Allocation Fund. In addition, he is a member of the Investment Policy Committee and trustee of the 50 South Capital Alpha Strategies hedge fund.
To learn more, register for Northern Trust’s webcast: The Next Five-Years: What Investors Can Expect.
As the COVID-19 pandemic continues to create uncertainty in global markets, get an inside look into our new capital market assumptions research. Learn about the key investment themes shifting the global asset allocation, risk and return landscape over the next five years – and what it means for investors.
Join our chief investment officer and chief investment strategist as they explore six key themes:
Retooling Global Growth
Massive Monetary Toolkit
Stuckflation Tested
One World, Two Systems
Reimagining Capitalism
Stay Focused on Climate Risk