Markets & Economy

Overweight stocks, but be mindful of overall diversification properties. We believe investors should overweight stocks and underweight bonds as the Omicron variant eventually subsides and more of the world continues to move away from the pandemic. However, we believe the potential for outsized stock-price gains relative to history has diminished after several years of solid returns. Elevated valuations, a maturing business cycle, and tighter monetary policies could create headwinds for assets during the year. We believe this is the time to evaluate risk tolerances, ensure proper diversification, and temper expectations for future price appreciation.