2016 Outlook | Capital Group
2016 Outlook

JANUARY 2016

This 2016 outlook provides continuing insights on topics like expanding U.S. growth, economic recovery in Europe and Japan, ongoing market volatility and global dividend opportunities.

 

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“I need my portfolio to grow but worry about world events. How do I get growth in the current environment?”

Highlights from this section include:

U.S.

The Brightest Spot in the Global Economy

With American consumers flexing their muscles again, the U.S. economy is experiencing moderate growth. But given an uncertain growth picture abroad and fluctuating energy prices, expect greater volatility.

Related Insights:

U.S. Valuations Should Be Judged in Broader Context

International

Selectivity Is the Key

The path to full economic recovery in Europe and Japan is uncertain, but central bank stimulus, currency weakness and falling energy prices are providing tailwinds for select companies. European periphery countries also present opportunities.

Related Insights:

Emerging Markets

More Volatility, More Value?

China’s woes have put some economies in a tough spot. Less demand growth for commodities and other exports could spell further setbacks for investors. But volatility may have a silver lining for selective investors: unusually attractive valuations.

Related Insights:

 

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"I rely on my investments to produce income but low stock and bond yields present a big challenge. What’s the right approach to income generation in today’s market?”

Highlights from this section include:

Dividends

In Hunt for Dividends, Go Global

Opportunities to invest in blue chip, high dividend-paying equities have gone global.  Companies that can generate dividend growth have also been less sensitive to rising rates and may offer a measure of stability in an uncertain environment.

Related Insights:

Dividend Growers Look More Favorable When Rates Rise

Bonds

Lower for Longer

U.S. interest rates may be heading higher, but the Federal Reserve is in no mood to move quickly. The “lower for longer” scenario remains intact and bonds continue to provide important diversification.

Related Insights:

Will a Rise in U.S. Bond Yields Be Held Back by Weight of the World?

Munis

Attractive Yield Opportunities

Choppy waters for stock markets barely register as a ripple in munis. Revenue bonds may offer a particularly attractive source of income and capital preservation. Should munis be a bigger part of your portfolio?

Related Insights:

Looking for a Source of Potential Diversification?

 

 


Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. 

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.