What “Trumpflation” Could Mean to Investors

The best scenario for investors is steady and low levels of inflation that ward off deflation but also discourage central banks from hiking rates too rapidly, says a Wall Street Journal article from last month. So far, the article asserts, “Trumpflation” has been embraced by deflation-fearing investors—but shareholders should be “keeping a watchful eye on consumer prices, as they often rise much faster than anticipated.” Richard Turnill, chief investment strategist at BlackRock Investment Institute, argues that although higher inflation supports corporate earnings (since increased wages are then spent by consumers), it can push down share valuations. Jason Trennert, chief investment […]

Curb Your Enthusiasm

Richard Turnill, BlackRock’s chief global investment strategist, advises investors to “curb their enthusiasm.”  Turnhill commented in BlackRock’s most recent weekly market commentary: “We see a global portfolio made up of 60% equities and 40% fixed income producing annual returns of just 3.3% in U.S. dollars before inflation over the next five years.” Turnhill speaks well of foreign stocks, emerging market stocks, and private equity, saying “our international equity return estimates are now above the long-term average, thanks to improved valuations outside of the U.S.” GMO presents a similar picture, warning “you’re going to be disappointed in the next seven years.” […]