Ultimately, we need to make decisions from a forward-looking perspective about the relative attractiveness of each asset class. One of the ways we do that is by conducting extensive and ongoing scenario analyses. In simple terms, we look at how each asset class might behave in a variety of possible economic and financial market environments.
Another way we seek to understand the relative attractiveness of each asset class is to look at the forecasts of other respected analysts who have well-researched and well-reasoned opinions. Our goal is to see things from yet another perspective that is independent from our own view. Often it involves recreating their analysis from the same raw data. This, too, is an ongoing process. Some analysts have views that are similar to ours, while others don’t. We especially consider those with differing views and challenge ourselves with the merits of their arguments.
Looking at asset classes from a number of angles helps us to further refine our outlook, develop stronger convictions and establish proper asset allocations. And we believe that’s essential as we seek to achieve superior risk-adjusted returns for you.