Capital Market Outlook
May 8, 2023
IN THIS ISSUE
- Macro Strategy — A War-like Policy Response from a Unified Federal Reserve and Treasury: Parallels between WWII and Coronavirus Eras: Both eras have been characterized by an interventionist Federal Reserve which facilitated high nominal gross domestic product growth and eventually very high inflation.
- Market View — Portfolio Construction for Turbulent Times: Think Hard Hats, Hard Assets and Hard Power: While investors remain guarded and cautious near term for numerous reasons, investors should recognize and position for the coming multiyear boom in U.S infrastructure.
- Thought of the Week — SPACs: Proof That Fads Fade: In our view, the swift rise and fall of special purpose acquisition companies emphasizes the importance of staying true to a carefully crafted long-term investing plan.
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The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S" or “Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.").
All recommendations must be considered in the context of an individual investor’s goals, time horizon, liquidity needs and risk tolerance. Not all recommendations will be in the best interest of all investors.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Bonds are subject to interest rate, inflation and credit risks. Treasury bills are less volatile than longer-term fixed income securities and are guaranteed as to timely payment of principal and interest by the U.S. government. Investments in foreign securities (including ADRs) involve special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are magnified for investments made in emerging markets. Investments in a certain industry or sector may pose additional risk due to lack of diversification and sector concentration.