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Chart of the week

Conservative goals suggest heightened need for alternative investments

Are investors falling out of love with the bull market? This week’s chart notes a shift toward fear as pressures mount across traditional markets.

February 15, 2020 | 1 minute read
  • Following a banner year in 2019, traditional equity and fixed income markets have maintained a strong momentum into 2020. Already up nearly 5% year to date, U.S. stocks reached another new all-time high this week.1 Meanwhile, falling interest rates have helped support the Barclays Agg, which has returned approximately 1.7% this year.1
  • However, given the combination of the current historic bull run, which is poised to enter its 11th year in March, and stock valuations that have become increasingly stretched, many investors appear to have increasingly moved toward the “fear” end of the fear-greed investment spectrum.
  • According to a study FS Investments conducted in partnership with InvestmentNews Research, investors’ main areas of focus with their advisors for the next five years are traditionally very conservative. As the chart shows, their top three goals include protecting against investment losses, generating income and diversifying their portfolios.2
  • Against a backdrop of outstanding returns for the traditional 60/40 portfolio in recent years with mounting pressures across traditional stock and bond markets, investors may benefit in the coming years by turning to alternative investments to meet their income and portfolio diversification needs.

  • As of February 13, 2020. U.S. stocks are represented by the S&P 500 Index.

  • FS Investments and InvestmentNews Research, http://bit.ly/2vt8byg.

The chart of the week and any accompanying data is for informational purposes only and shall not be considered an investment recommendation or promotion of FS Investments or any FS Investments fund. The chart of the week is subject to change at any time based on market or other conditions, and FS Investments and FS Investment Solutions, LLC disclaim any responsibility to update such market commentary. The chart of the week should not be relied on as investment advice, and because investment decisions for the FS Investments funds are based on numerous factors, may not be relied on as an indication of the investment intent of any FS Investments fund. None of FS Investments, its funds, FS Investment Solutions, LLC or their respective affiliates can be held responsible for any direct or incidental loss incurred as a result of any reliance on the chart of the week or other opinions expressed therein. Any discussion of past performance should not be used as an indicator of future results.

This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. FS Investments is not adopting, making a recommendation for or endorsing any investment strategy or particular security. All views, opinions and positions expressed herein are that of the author and do not necessarily reflect the views, opinions or positions of FS Investments. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. FS Investments does not provide legal or tax advice and the information herein should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact any investment result. FS Investments cannot guarantee that the information herein is accurate, complete, or timely. FS Investments makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

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