Special Report: Astoria's Q3 Investment Outlook

Don’t invest based on Swine Flu, politics, or Lambda variants. We still like cyclicals & inflation sensitive assets but are hedging this risk. Add incremental dollars to more defensive factors like Quality and Dividends.


What to expect going forward

  • Long term return expectations have little to do with Delta/Lambda variants.

  • We are more worried about expensive valuations than Covid variants.

  • Investing requires mental fortitude. Most don’t have it. For those that do, the reward can be great.

  • The media wants to convince you that we are reaching peak growth.

  • The reality is that we have likely reached peak sentiment and valuations.

  • After an epic rally in stocks from the March 2020 lows, bargains are tougher to find.

  • This is all the reason to diversify across factors and hedge equity risk.

  • Don’t invest based on early vs. mid vs. late cycle. That’s noise to us. Focus on factor risk premiums.

  • We simply think that valuations are nearly full for most asset classes. Incrementally, we prefer to add risk in more defensive assets (i.e. companies with strong free cash flow, ability to grow US dividends, companies with strong ROE/ROA) with any additional dollar invested in the market.

  • The first half of the year was characterized by higher inflation, higher rates, longer duration assets underperforming, and cyclical factors outperforming defensive ones.

  • Bonds don’t have a great risk/reward. We are using very short duration bonds in the floating rate and inflation sensitive sectors to lower our portfolio volatility and hedge rising rates.

  • Alternatives with low correlation to stocks are worth their weight in gold given high valuations.

Click here to read the full research report

Click here for Photo Source