Distancing

Tim SchlindweinInvesting, Market Observations

Globalization has brought the world closer in many ways. But one adverse outcome, the spread of infectious disease, now is pushing us apart as borders are closed. Closer to home, we are encouraged to practice social distancing. The immediate economic outcome is slower real growth. The immediate market outcome is a sell-off in risk assets, notably stocks, and a demand for safe-harbor assets, particularly U.S. Treasuries. Risk distancing seems to be the current antidote for market uncertainties, but returns are not achieved over time without taking risk. A look at some important relationships can provide perspective and investment implications.

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