Given the Fed’s policy goal to raise prices, we are increasing our exposure to inflation-protected securities and commodities, taking some profits from emerging arket debt and REITs (see page 2).
Though the Federal Reserve’s second round of Quantitative Ease (QE2) wasn’t announced until Nov. 3, anticipation of and reaction to the actual news as already had some desired effects. Since late August, when Fed Chairman en Bernanke raised the possibility of additional QE, US equities have gained 13%, inflation expectations as measured by the US TIPS market have increased by half a percentage point, the dollar has declined by about 3% and the yield curve has steepened. All these moves point to higher inflation and stronger economic growth ahead.
See Special Reports for the December Graystone Investors’ Monthly featuring “Welcome to the Expansion.” The business-cycle recovery in the global economy that began in the summer of 2009 is over. Now, it is an expansion. At $62 trillion, the global economy is larger than ever before, according to the International Monetary Fund. According to Chief Investment Officer Jeff Applegate, Chief Investment Strategist David M. Darst and Global Investment Strategist Charles Reinhard, “On a country-by-country basis, the global economy is expanding at varying speeds. Also inside, "Markets with Room to Run”, which explores the MSCI Emerging Markets Index’s potential over the next year with Emerging Markets Equity Strategist, Elizabeth Lynn.
For the latest Global Investment Committee meeting report, please click on the Special Reports link on the left and choose Global Investment Committee: Summary of Monthly Committee Meeting.
See Special Reports for the September Graystone Investors’ Monthly featuring “Committed to Growth.” Acknowledging the growing concerns about the economic recovery, the Federal Reserve upped its policymaking commitment to stem further deterioration of US growth and simultaneously curtailed plans to end its stimulative monetary policy. According to Chief Investment Officer Jeff Applegate, Chief Investment Strategist David M. Darst and the Global Investment Committee, “Morgan Stanley and Citi economists continue to forecast modest but sustained global growth in 2010 and well into 2011. Such an economic backdrop should be conducive to continued corporate profits growth.” Also inside, "In the Goldilocks Zone” which explores the emerging markets fortunes in China.