Tales of the Unexpected


Ian Pizer,
Head of Investment Strategy, Aviva Investors

The term “Goldilocks economy” was coined in 1992 to describe the U.S. economy which, at the time, was experiencing moderate growth and low inflation. In other words, it was neither too hot nor too cold, but “just right.” At the end of 2007, after the advent of the credit crunch, prominent economist Nouriel Roubini took part in a heated televised debate over whether the term could still be used to describe the U.S. economy. In 2008, the Dow Jones Industrial Average lost nearly a third of its value. In 2015, the U.S. economy has seen some restoration of the Goldilocks economy, with a boost of living standards while generating minimal inflation. However, investors still need remain vigilant following the market’s bull run.

As the year draws to a close, a number of concerns weigh on investors – the Federal Reserve’s first rate hike in nine years, China’s ongoing economic woes, and pricing pressure in oil and commodities markets. In this commentary, Aviva discusses some of the risk reduction strategies that may help investors be prepared for the expected (and unexpected) sources of potential market volatility ahead.  

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