Security selection was strong with the Strategy’s Energy and Information Technology names boosting results.
Oversold conditions at the end of 2018 led to a burst of buying activity to start the year, and the equity markets rebounded sharply.
We remain confident that underlying fundamentals remain solid and expect the economy to continue to grow at a measured pace.
The impact of emotion has created a bear market for logic in the markets.
Security selection was strong and the Strategy beat its benchmark, the Russell 3000® Value Index, for both the quarter and full year.
A focus on potential economic pitfalls resulted in a jump in volatility, a move toward more defensive areas of the market, and a heightened focus on valuations.
We remain confident that while the pace of earnings growth may slow in 2019, underlying economic fundamentals remain relatively solid.
Economic uncertainty could cause investors to seek more reasonably valued businesses over high-flying glamor names.
Employment and corporate earnings remained robust, but building headwinds stoked debate about whether the economy was entering a new phase.
Strong employment figures, robust manufacturing readings, and bullish consumer sentiment reignited a fear of missing out on the part of investors.
Investors sought clarity as they faced conflicting macro headlines for much of the period.
An uncertain future has led some investors to take a risky path in pursuit of growth and momentum.
Higher interest rates, a stronger dollar, and talk of trade wars injected uncertainty into an economy that otherwise showed signs of continued strength.
The vitality of the business climate appears underappreciated.
Investors responded to a murky economic outlook by gravitating toward growth-oriented names, defensive areas, and larger businesses.
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