Markets Should Prepare for Higher Volatility: Northern Trust

The transcript discusses the influence of retail investors on the tech rally, highlighting concerns about high valuations and potential profit-taking. It examines market volatility, particularly the VIX, and how investors might adjust their strategies in response. The discussion also covers the safety of bonds in a central bank-dominated world, considering inflation expectations and the implications for investment strategies.

What factor is suggested to have spooked retail investors during the tech rally?

• Strong economic recovery

• Low interest rates

• Option buying stories

• High Treasury bids

What is a potential strategy if you believe the economy will continue to recover despite a temporary spike in the VIX?

• Sell all equities

• Buy the dip

• Invest in gold

• Hold cash reserves

What are some factors contributing to the current market volatility?

• Stable interest rates

• Decreasing unemployment rates

• Rising oil prices

• Brexit and US-China trade conflict

In a world where central banks rule, what is a key consideration for bond investors?

• Real estate prices

• Corporate earnings

• Long end of the yield curve

• Short-term interest rates

What might challenge the inflation story in the future according to the discussion?

• Decreasing demand

• Monetary and fiscal support

• Stable commodity prices

• Rising unemployment