Investment Outlook: Discipline Amidst Volatility
As the financial landscape continues to face significant volatility and uncertainty, investment leaders at American Century Investments, a prominent global asset manager, stress the importance of discipline and patience in navigating these turbulent waters. With more than $270 billion in assets under supervision, their insights come at a crucial time as economic conditions shift dramatically.
The Current Economic Climate
Rich Weiss, the Chief Investment Officer of Multi-Asset Strategies at American Century, candidly describes the current environment as one marked by unprecedented economic upheaval. He mentions that the past six months have felt exceptionally tumultuous, far beyond what one might typically expect in a year. According to Weiss, the current level of economic policy uncertainty in the United States is unprecedented, and the implications of this uncertainty are significant for investors.
Victor Zhang, also a Chief Investment Officer at American Century, provides a poignant illustration of the recent market fluctuation. He notes that if someone had taken a sabbatical during April and returned to find the S&P 500 unchanged, they might not have realized the volatility that had occurred, including sharp declines and recoveries. This emphasizes a critical lesson: reacting emotionally to market swings can often lead to more detrimental outcomes than the volatility itself.
Understanding Volatility
In their outlook, investment professionals at American Century highlight the fundamental difference between economic uncertainty and actual negative outcomes. Weiss points out a growing divide between 'hard data,' such as employment statistics and inflation metrics, and 'soft data,' which includes consumer sentiment and expectations. This divergence creates a plausible case for both bullish and bearish scenarios. While resilient labor markets and robust retail sales paint an optimistic picture, declining consumer confidence and a pessimistic manufacturing outlook suggest caution.
The Importance of Long-Term Discipline
In times of uncertainty, the emphasis on long-term discipline remains paramount for American Century's investment strategy. The firm is dedicated to delivering superior, risk-adjusted returns over extended periods. They believe that their unique ownership structure, which allows them to prioritize long-term performance over quarterly earning expectations, provides a significant advantage in turbulent markets. This alignment puts clients' interests first, enabling American Century to focus on enduring value rather than succumbing to short-term market noise.
In a world where market sentiment can change rapidly based on news headlines, substantial value lies in adhering to a carefully considered investment plan. Zhang advocates for a well-balanced portfolio that can leverage short-term market variations. Diversification, he argues, is often the best protection against increased uncertainty.
Moving Forward
As 2025 progresses, investors should bear in mind that uncertainty should not be interpreted as an adversary, but rather as a factor to be managed thoughtfully. Emotional responses to market shifts can lead to poor decision-making, and that’s where the investment community must exercise caution.
Ultimately, for ongoing investment guidance in 2025, stakeholders are encouraged to refer to the full American Century investment outlook, which promises insights covering various areas including the global macroeconomic outlook, U.S. equity outlook, global equity outlook, global fixed income outlook, multi-asset strategies, and trends in sustainable investing.
About American Century Investments
Founded in 1958, American Century Investments has positioned itself as a premier global asset management firm focused on investment outcomes and fostering long-term client relationships, all while championing medical research. With over 1,400 employees globally, American Century Investments serves a range of clients including financial professionals, institutions, corporations, and individual investors from numerous locations, including Kansas City, New York, and beyond. Their unique company structure allows for substantial reinvestment into philanthropic research endeavors, specifically by directing over 40% of its dividends to support the Stowers Institute for Medical Research. This leads not just to client satisfaction, but also advances critical medical breakthroughs. For more information about American Century Investments, please visit
www.americancentury.com.