With interest rates remaining high for an extended period of...

With interest rates remaining high for an extended period of time, investors did not see the need to empty their cash allocations at this time. Now, as the process of lowering interest rates kicks in, investors who have been on the sidelines should consider accelerating their actions.

Envision possible future scenarios. Suppose the economy avoids a recession and achieves a 'soft landing'. In this scenario, riskier assets (e.g., equities, etc.) will outperform. Conversely, suppose the economy does fall into a recession. Bonds provide stability and a hedge against downside risk. Further, if inflation re-accelerates. As we will see in 2024. alternative investments such as real assets are likely to outperform the broader market while also providing access to investments that participate in long-term trends such as industrial policy and the energy transition.

It is important to note that even in 2024, when cash yields are at their best level in more than a decade, cash assets are still lagging most other asset class indices: rolling U.S. Treasuries have returned 5.1%, while U.S. equities have risen 26% and U.S. investment-grade bonds have returned 8.5%. Over time, compounded returns could lead to significant differences. $Nasdaq Composite Index(.IXIC.US)$