The Search for Sustainable Growth

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By Prabha Ram, CFA - April 2019

I see the economy as a three-legged stool: one leg is consumer demand; another is the influence of U.S. Federal Reserve policy; and the third is business fundamentals. And while the first two are critically important, my team and I tend to focus more on that third element—business fundamentals—and work to find companies that can compete and grow sustainably in any part of the economic cycle.

We experienced an impressive rebound in the first quarter of this year, especially considering how equity markets experienced a sharp fall in Q4 2018. And while I envision continued growth this year, I think it will be slowing a bit.

There are a couple of related issues that worry me: the first is the flat and in places inverted yield curve, and how it historically has been a potential indicator of economic headwinds. The second is the difficulty of banks to make money in a low rate and flat curve environment, by constraining the availability of credit.

Check out my latest quarterly video to find out more on those two topics and much more.


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