This summer’s “lower for longer” rush for fixed-income and income-oriented equities ignored that deflation appears to slowly be giving way to re-inflation. Although some of our themes have become incrementally popular since the election last month, our overall positioning still seems quite out of consensus.
Investors could be surprised in 2017 by the strength in the nominal economy, and might have to significantly reposition their portfolios toward more cyclical investments.
Richard Bernstein is chief executive and chief investment officer at Richard Bernstein Advisors.