Q4 2014 Outlook: Trick or Treat?

Has the world fundamentally changed during these past four weeks? As of the time of writing this Quarterly Outlook, asset markets are in the process of testing each investor’s conviction in the fundamental strength and valuation of the investments they have made. Did the world awake from a low-volatility slumber to see a world completely different from what they believed it to be just a short time ago?

That is what has been suggested by the asset markets these past four weeks. After years of strong, relatively uninterrupted trends higher in risk assets, what has taken hold these past few weeks is fear. Fear from traders that they would be the last one in the market if the global progress made these past five years has been a trick.

When we evaluate the businesses in our core themes, we continue to see real strength. On the following pages, you will see the work we have done to assess our conviction. More than that, we are using this time as an opportunity to assess whether valuations are opening up new ideas through which we can turn this near-term trick into a long-term treat.

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