Despite new highs and expensive valuations in certain markets, the macroeconomic environment makes the case for an overweight in equities over their fixed-income counterparts. After U.S. activity exceeded expectations in Q3, GDPnow is forecasting a growth of around 3.5% for Q4 and there is no indication that the trend will falter next year - barring any unforeseen shock. Consumer confidence has also only been this high twice since 1967, the inception year of this measure. At these levels, enthusiasm usually persists for two years before the economy overheats and goes into recession (Chart Below).
** I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial **