A Cinderella Story
Many investors do not believe turns from inflection points until they are well entrenched. We believe 10 year government rates (light blue lines above) have passed the inflection point and are headed higher on prospects for better global economic growth.
Financial repression (artificially low rates) by the Fed is ending, as they have indicated clear intentions to raise rates. Low and declining rates have caused Value and Cyclical stocks (dark blue lines above) to underperform for many years now. We think rates continue to move higher over the next few years and cause these biases to reverse.
Our disciplines have seen improved performance since mid-2016 as attractively valued stocks have outperformed their peers. We believe this "Cinderella Story" could continue for some years to come while better economic growth is expected.
This publication has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy, or investment product. Past performance does not provide any guarantee of future performance, and one should not rely on performance as an indication of future performance. Commentary may contain subjective judgements and assumptions subject to change without notice. There can be no assurance that developments will transpire as forecast. Information contained herein has been obtained from sources believed to be reliable but not guaranteed. No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission of Todd Asset Management LLC. © 2017