What keeps you up at night? We asked our Research department that very same question. Here is a list (in no particular order) of some of the biggest worries we see out there right now. In full disclosure, we will compile a list of our biggest reasons to be optimistic next week, we’re just starting with the worries.
“Negative feedback loop of, and an unwind of, levered trades in risk assets (selling begets selling).”
“China currency devaluation.”
“Financials and China both continue to look technically weak.”
“The historic volatility we’ve seen so far this year continues. Bear markets tend to be led by volatility, bull markets aren’t.”
“The implications of the total lack of faith that many Americans now have in ‘the system.’”
“Inflation picks up and central banks lose their excuse for continued easing.”
“Economic uncertainty in China causing political instability.”
“I’m most concerned with economic indicators not being able to convince market indicators that we’re not headed for a recession, and whether my favorite bands will be touring this year.”
“Paying for college.”
“Aging baby boomer impact on the federal budget for the next President.”
“Middle East instability breeding terrorism.”
“Recent increase in sugar prices creates cookie price inflation.”
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The economic forecasts set forth in the presentation may not develop as predicted.
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Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.
Currency risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.
Leverage is the degree to which a company uses fixed income securities such as debt and preferred equity. The more debt financing a company uses, the higher its financial leverage.
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