When I joined CWM in September 2016, financial market headlines were being dominated by the threat of Brexit, looming US election risk, and a search to understand the economic implications of a very low-yielding 1.5% ten-year US Treasury. Three years and about 500 emails later, the outcome of Brexit remains in question, US election risk looms once again, and the ten-year US Treasury still yields just 1.5%. Along the way and buoyed by a strong economy and a helpful tax cut, the S&P500 has returned approximately +45% cumulatively over the past three years, vastly outpacing the total return for both international stocks and traditional fixed income. Over this period markets have overcome an abundance of political drama, a US government shutdown, a quantitative tightening cycle, and a -20% temporary drawdown on global equities. Risk has been rewarded because the economy continues to expand, corporate earnings continue to grow, inflation remains benign and both credit conditions and monetary policy remain accommodative.
So, now what?
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