A recession is defined as an economic period where GDP declines for two consecutive quarters. We believe the next recessionary period will be different as a result of artificially low interest rates.
The United States’ proclivity to print money and maintain artificially low interest rates makes it difficult for institutional investors to find yield. Gone are the days of earning a meaningful return through savings accounts and high grade fixed income securities. Thus, while a number of richly valued Technology stocks (to pick on my former sector), have room to trade down, we would expect them to settle in at valuations that are historically higher than past recessionary periods when interest rates where allowed to find a natural equilibrium.
We expect for equities, venture capital and private equity to be among the asset classes that continue to perform well as investors hunt for yield in this artificially low interest rate environment.



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