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

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

We are in a new regime where “higher-for-longer” is likely and risk has a cost. We believe a diversified allocation is essential in this increasingly unpredictable environment. Our value philosophy focuses on quality, leading companies that are mispriced or misunderstood by the market and are trading at a discount to their intrinsic value.

03.01.2024 | 07:02 Uhr


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.



The value of investments may increase or decrease in response to economic, and financial events (whether real, expected or perceived) in the U.S. and global markets. The value of equity securities is sensitive to stock market volatility. Diversification does not eliminate the risk of loss. Active management attempts to outperform a passive benchmark through proactive security selection and assumes considerable risk should managers incorrectly anticipate changing conditions.

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.

This material is for the benefit of persons whom the Firm reasonably believes it is permitted to communicate to and should not be forwarded to any other person without the consent of the Firm. It is not addressed to any other person and may not be used by them for any purpose whatsoever. It is the responsibility of every person reading this material to fully observe the laws of any relevant country, including obtaining any governmental or other consent which may be required or observing any other formality which needs to be observed in that country. Unless otherwise stated, returns and market values contained herein are presented in [insert correct currency].

This material is a general communication, which is not impartial, is for informational and educational purposes only, not a recommendation to purchase or sell specific securities, or to adopt any particular investment strategy. Information does not address financial objectives, situation or specific needs of individual investors.

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..


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.

A separately managed account may not be appropriate for all investors. Separate accounts managed according to the particular Strategy may include securities that may not necessarily track the performance of a particular index. Please consider the investment objectives, risks and fees of the Strategy carefully before investing. A minimum asset level is required.

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