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Reversing the gains from earlier in Q3, September’s market rout brought U.S. and global equity indexes back into bear market territory. Uncertainty, volatility, and recession risk are elevated, but investors should keep in mind that innovations and opportunities often emerge from periods of volatility.
Recessions are typically the shortest part of the business cycle, but decisions made during periods like these can shape investment outcomes for years to come. We believe investors can use the current environment to reposition portfolios and use this opportunity to harvest losses for tax purposes.
Key Takeaways
- We expect a gradual U.S. economic contraction that is less severe than prior recessions.
- Defensive and quality-focused positions remain relevant due to lower cyclicality of earnings.
- Diversification benefits are most noticeable during market turmoil, and they highlight the value of an…
