Executive Summary Q3 2018

Third Quarter 2018 Market Perspectives Executive Summary. Inside, you will find a summary of market activity and our market outlook.


Portfolio Themes

• Quality Tilt: As the bull market progresses, we prefer equities with stronger balance sheets and consistent margins.

• Overweight to Information Technology: The Information Technology sector is heavily skewed toward large, high-quality firms—a segment we expect to outperform in the later stages of a bull market. The sector should also benefit from robust global IT spending driven by the growing demand for products and services related to mobile, cloud computing and the “Internet of Things.” 

• Overweight to Health Care: Health Care should benefit from increasing investor preferences for larger, higher quality companies with long term growth prospects. Within the sector, M&A, rapid EM growth and strong research and development pipelines are leading to record drug approvals and healthy sales growth.

 

Market Outlook

•  Growing Investor Confidence: Investor optimism typically increases as a bull market matures. Recent correction angst notwithstanding, US sentiment has improved but is not yet euphoric. Meanwhile, growing optimism in the US remains unmatched by European investors.

•  Strong Economic Drivers: In both developed and emerging markets, economic drivers remain strong. We believe these fundamentals will come to the forefront as sentiment improves.

•  Global Political Gridlock: In much of the developed world political gridlock persists decreasing the likelihood sweeping legislation potentially hurting equities passes. With US midterms in Q4 the president’s party typically loses power increasing gridlock. US equities have risen in 87% of midterm year Q4s—and each of the two subsequent quarters.

Download Fisher Investments Market Perspectives Executive Summary - 2018 Q3