The Dual Dilemma

Advisors are facing an investment dilemma on two fronts.

The State of Fixed Income Markets
  • Bond bull market appears out of gas
  • Traditional role of bonds is in peril
  • Yields low, but appear set to rise
  • Quantitative easing – elephant in the room
  • Massive flows into spread products
The State of Equity Markets
  • U.S. equity markets near all-time highs
  • Valuations priced for perfections
  • 2nd-longest bull market in history
  • Foreign equity markets falling
  • Uncertainty regarding Trump
It’s a Rock and a Hard Place Scenario

Low interest rates punish savers, forcing them to stretch for income and risk principal. Yet when rates rise, principal will be eroded.

 

Investors need to maintain equity exposure to grow wealth, but most investors cannot afford another large drawdown and long recovery. Meanwhile, fixed income assets may not be able to serve their portfolio protection role.

Navigating the Dual Dilemma

How are you prepared for these historic challenges?    

What are you doing differently?

 

Since 1997, the Swan Defined Risk Strategy has addressed this Dual Dilemma.