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As the economy slows, favor consistency over volatility
In many ways 2023 continues to be the mirror image of 2022. One market dimension where this is most apparent: For much of the year, the most volatile assets have been some of the best performers. Last year the most volatile companies were sold as investors wrestled with a rapid rise in inflation and surging interest rates. In contrast, 2023 has witnessed a surprisingly rapid return to these same companies. Through the July market peak, the volatility style factor, i.e. companies with more price volatility than their peers, outperformed. Since then, there has been a shift in investor preferences towards stability. As ... (full story)