For those lucky investors who have a crystal ball, investing is easy. For the rest of us, we must consider a matrix of potential economic outcomes. In order to chart the best course for your portfolio we evaluate the probability of returns for each asset type and weigh each return forecast by scenario. We consider appropriate diversification for situations where our base case scenario is not the one that comes to fruition. Perhaps the proverbial crystal ball will become a reality with leaps in quantum computing technology. Until then our best bet is to utilize a thoughtful, process-driven approach using quantitative and qualitative inputs and a framework for comparing outcomes across an array of probability weighted scenarios. We call that tool our Stress Test Scenario Analysis Tool. It helps us broaden our thought process beyond just what is expected to include what could possibly go wrong.

Working closely with SFOs (Single Family Offices) is an important segment of Pathstone’s business. This commitment has afforded us the opportunity to better understand several common and interrelated Trends within the Single Family Office community. Below is an outline of the main Trends that we continue to observe as we work with new and existing SFOs.  Several of the Trends overlap and we have noticed that best practices include thoughtful consideration of how integrating these decisions create the most successful path forward.

While the global economy continues to reopen, we keep our sights set on developments related to several major themes: what comes next for the virus, whether inflation proves to be transitory, when the Fed will start to taper asset purchases, clarity on infrastructure spending and tax reform, and trade relations with China, just to name a few.