Timing vs Selection - VP June 2024 Asset Allocation Call [video + AI summary]

• Macro: Leading indicators are improving, suggesting the parts of the US economy that were recessionary last year (e.g. manufacturing, housing) are set to recover. Fiscal deficits remain large and credit surveys show that lending standards are no longer tightening. This reduces the likelihood of a deteriorating labor market causing larger negative feedback loops.
• Equities: Focus on relative value opportunities within equities. In terms of timing the business cycle, US large caps have already correctly anticipated the benign US growth outlook, so we see no reason to overweight equities vs bonds.
• Fixed Income: Nominals seem fairly priced. TIPS remain attractive.
• Real Assets: In the next downturn, we suspect real assets will offer better protection than long-dated nominal government bonds.

Links to Asset Allocation and Desert Island dashboards.