Investing in the Late Cycle

The US economic expansion is now in its tenth year, and we are venturing deeper into the late stages of the market cycle where investing conditions are challenging.

Schroders has the expertise to help investors exploit opportunities in difficult markets, while managing volatility to protect portfolios from significant drawdowns.

Markets have been on a rollercoaster ride since the end of 2018 with large sell-offs followed by similarly impressive rebounds in early 2019, forcing investors to consider if a recession is imminent.

Are we at the end?

Predicting the end of a market cycle is difficult, particularly against a backdrop of ultra-accommodative monetary policies that have defined and distorted markets over the last 10 years.

While the economy is set to slow in 2019, we believe that we are in a late cycle - and not end cycle - environment.

 

58 Months

Duration of the average US expansion1

Late cycle challenges

Market dynamics are shifting. Tailwinds are fading, valuations offer little margin for error, and structural vulnerabilities are abundant.

Political risks, and the speed at which interest rates will rise from this point on are some of the unknowns that further complicate the outlook for asset markets.

Video: 4 Stages

Of the economic cycle explained

Late in the game, time to adjust your strategy?

We believe there are strategies investors can consider to take advantage of opportunities, and to reduce risk in the prevailing market environment.

1National Bureau of Economic Research, data between the periods of 1954 to 2009.
2Schroders, Global Investor Study 2018.

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