The past three months have provided a stark reminder of the unpredictability of global politics and its impact on financial markets. The second quarter began with equity, bond, and currency markets reacting strongly to the U.S. government’s proposed new tariffs in early April. Then, in late June, investors had to process escalating hostilities between Israel and Iran and the U.S.’ involvement in this perilous situation.
Times like these underscore the primacy of risk management’s role in investing. As has always been true, diversification can be one of the most powerful tools for managing risk.
Diversification can take multiple forms. In addition to building portfolios with the proper mix of stocks, bonds, cash, and alternative asset classes, investors can mitigate risk by spreading their exposures across regions and sectors.
In this edition of Client Focus, William Blair’s Debra Schalk, fixed income trading & strategy director, shares insights into how fixed income investments can hedge against credit and interest rate risk, reducing sensitivity to market volatility. We also hear from Hugo Scott-Gall, head of our global equity team, and Olga Bitel, global strategist, on the theory of competitive advantage, tariff implications, and compelling growth opportunities in Europe and China. In addition, Equity Research Analyst Phillip Blee explores how consumer spending trends are shaping the projected performance and risk in various sectors.
The principles of diversification should influence how investors think about their wealth strategy. William Blair’s Private Wealth Management team works with clients to determine the optimal tools—including tax-advantaged retirement accounts, education savings plans, direct gifts, trusts, and donor-advised funds—for achieving investors’ long-term vision for retirement, wealth transfer, and charitable giving in a tax-efficient way. Later in Client Focus, William Blair clients Michele Speaks and David Warnock discuss the importance of arts, culture, and philanthropic involvement in the Baltimore community.
At William Blair, we are dedicated to using our expertise, resources, and insights to help you achieve your objectives with confidence and clarity. Thank you for your continued trust in our team. Please do not hesitate to contact me directly at CEOPerspective@WilliamBlair.com with any questions or comments you may have.
Sincerely,
Brent Gledhill
President and CEO