Higher interest rates in the U.S. — and less quantitative easing from the US Federal Reserve and European Central Bank — will likely reduce liquidity and create higher market volatility for investors in 2019. Because navigating the markets successfully may take greater skill, we believe investors should consider actively selecting where to invest, rather than passively accept market returns — understanding there is no guarantee that any type of strategy will outperform.
The global economy — which has been doing fairly well — is likely to become even less synchronized and more fragmented. This would