Morgan Stanley IM: The New Normal: Higher-for-longer is likely and risk has a cost in a new regime

KEY TAKEAWAYS

1.The post-global financial crisis period through 2021 was an anomaly; we are now closer to the ~50 years that preceded this 15-year-long anomaly.

2. Without the Magnificent Seven, the Russell 1000 Growth Index’s returns are far more like those of the Russell 1000 Value Index in 2023.

3. We are now in a different rate regime, where there may not be one winner who takes all, and where a balanced equity exposure is essential.

^{RISK CONSIDERATIONS}

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^{Forecasts and/or estimates provided herein are subject to change and may not actually come to pass.}

^{Correlation is a statistical measure of how two securities move in relation to each other.}

^{Index performance is shown for illustrative purposes only and is not intended to represent historical or to predict future performance of any specific investment or [MSIM strategy]. Past performance is not a guarantee of future results.}

^{The views and opinions are those of the author as of the date of publication and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. The views expressed do not reflect the opinions of all investment personnel at Morgan Stanley Investment Management (MSIM) and its subsidiaries and affiliates (collectively the Firm”), and may not be reflected in all the strategies and products that the Firm offers.}

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^{Any charts and graphs provided are for illustrative purposes only. Any performance quoted represents past performance. Past performance does not guarantee future results. All investments involve risks, including the possible loss of principal..}

^{IMPORTANT DISCLOSURES:}

^{Past performance is no guarantee of future results. The returns referred to herein are those of representative indices and are not meant to depict the performance of a specific investment.}

^{There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market.}

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