Three Reasons for Optimism Despite Market Uncertainty

Sébastien Page, CFA®, Head of Global Multi-Asset and CIO


These are really difficult times to make asset allocation decisions. We’ve just had the worst data for unemployment claims in history, and it’s forecasted that this year we’ll lose more in terms of GDP than we did throughout the entire financial crisis of 2008 and 2009. So I wanted to put these numbers in context and offer some balance – Three reasons to be optimistic. Because it’s difficult nowadays to be optimistic.

First, we will get through this. It’ going to take a long time. But we seem to have reached a point in the pandemic where things have stopped getting worse, and if you look at the jobless claims, at least 80% of them are already classified as temporary. And also a lot of them are in the service sector, and typically those jobs are easier to put back on line than for other sectors of the economy.

Second, we’ve had a tremendous amount of stimulus, representing about $10 trillion globally between monetary and fiscal measures. Authorities have learned from the 2008/2009 crisis. One of our portfolio managers in our multi-asset division put it this way, “You’re looking at some of the worst economic data ever against the biggest set of stimulus measures ever. And if you don’t like to fight the Fed, it’s hard to get bearish here.”

Third, it doesn’t feel like it because equity markets have rallied from the bottom, but expectations are actually quite low at the moment. There’s a lot of pessimism. Earnings forecasts are dropping like a stone. GDP forecasts are dire. Investor confidence, close to an all-time low. And there is a lot of cash on the sidelines if you look at the assets under management in money market funds, for example. So when expectations are that low, there is room for positive surprises that can sustain risk assets even though it doesn’t feel like it.

So what does it mean for investors, in particular those concerned with asset allocation decisions.

Now’s the time to remain diversified and invested for the long run. And for those who are fairly far from retirement, it means a healthy allocation to risk assets and stocks in particular.

Important Information

Where securities is mentioned, the specific securities identified and described are for informational purposes only and do not represent recommendations.

This material is being furnished for general informational purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date written and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request.

It is not intended for distribution to retail investors in any jurisdiction.


Latest Date Range
Audience for the document: Share Class: Language of the document:
Download Cancel


Share Class: Language of the document:
Download Cancel
Sign in or register to view more information.
Continue with sign in?
To complete sign in and be redirected to your registered country, please select continue. Select cancel to remain on the current site.
Continue Cancel
Once registered, you'll be able to start subscribing.

By clicking the Continue button, I acknowledge that I have read and accepted the Privacy Notice

Continue Back

Change Details

If you need to change your email address please contact us.
You are ready to start subscribing.
Get started by going to our products or insights section to follow what you're interested in.

Products Insights

GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

Other Literature

You have successfully subscribed.

Notify me by email when
regular data and commentary is available
exceptional commentary is available
new articles become available

Thank you for your continued interest