Jim McDonald, Chief Investment Strategist, Northern Trust met with Julie Cooling, Founder & CEO, RIA Channel to discuss his macro world view and how it’s driving investment strategy for 2019 and beyond.
In his recently posted outlook, “The Next 5 Years: What Investors Can Expect,” McDonald shares his thoughts on major world trends impacting future growth, risk and returns. Going into 2019, predictions of a slower growth environment and concerns over rising rates have prompted reduced risk in the portfolios, explains McDonald. However, he does point to opportunities in credits markets, high-yield bonds and natural resources for inflation protection.
Unlike the last five years of major growth, McDonald believes, investors will likely experience, “good but not great returns across most asset classes.” Shifting to an underweight position in equities, McDonald sees emerging markets as “lagging” this upcoming year, while fixed income is on the rise. On the alternatives side, Northern Trust utilizes both hedge funds and private equity. With threats of trade wars and potentially overly-aggressive rate hikes on the horizon, McDonald will continue to keep a close eye this administration’s movements and overall market responses.
Established in 1889, Northern Trust manages $1.8 trillion in assets and serves a variety of clients and institutions all over the world.