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Cannabis and industrial hemp are projected to be large disruptors across many industries that include agriculture, construction, energy, textiles, and law. The industry is also moving at an accelerated pace and has opened up global investment opportunities. How to participate in this sector and how to perform proper due diligence are the questions many high net worth investors are asking. The first step is to not allow emotions driven by a fast-paced business environment overtake sound investment principals.

Volatility has returned to risk asset markets and has investors asking: “Is this time different or is something else afoot”? In this dedicated Global Family Office investor letter, we cover the volatility and the importance of multi-asset portfolios; the power of diversification to offset ever-present market drivers; and evaluating risk capacity and risk preferences in the volatile market environment.

Market volatility in late 2018 has investors wondering if 2019 will bring global recession and investment losses. Chief Investment Strategist Jim McDonald answers tough questions about the global economy and how markets should react. Chief Economist Carl R. Tannenbaum also shares his views on the nature of recessions.

One element of successful investing is assessing how investor expectations may change over time. We began warning in mid-2018 of a growth slowdown in 2019, which came to a head in the fourth quarter when growth concerns led to a significant reduction in risk appetite and valuations. Souring investor expectations set the stage for positive surprises over the next year, which we think improves the outlook for risk taking.

In response to the proliferation of new private credit strategies and managers, a new set of benchmarks was developed to help limited partners assess the performance of new and existing fund managers (general partners or GPs). By focusing on the underlying risks assumed by a credit manager, the subordinated capital and broad credit opportunities benchmarks will assist limited partners in better evaluating risk-adjusted performance and identifying the most talented managers.

Private investments, particularly private equity and venture capital have provided the strongest relative returns for decades. For families with multigenerational wealth, they may be particularly well positioned to consider allocating 40% or more of their assets to private investments. Assuming these families have the requisite long-term time horizon, patience, and ability to act quickly, they stand to benefit not only from the potential for higher returns but also from the tax-advantaged nature of private investments. Life could get better after 40%.

The year 2018 ended on a far different note than it started, with the economy stronger and markets weaker than most had projected at the outset. More perplexingly, underlying economic fundamentals remain quite strong with declining gas prices and interests, and steady jobs and wage growth.

At the start of 2019, the market’s perception of risks and the resulting volatility is high, a stark contrast to the complacency and strong growth expectations in the prior year. It is important to reflect on recent history, but it is also important to recognize how expectations can change and stay grounded in a broad understanding of the business environment and market valuations—thus our themes as outlined in this Market Insights: the late stage expansion; the not-so-invisible hand; diversification fatigue; and not all international markets are equal.

There are three reasons why investors should be considering preferreds in a rising rates environment: its low duration structures, its wide credit spreads, and its high levels of income. In this video, Brian Cordes, discusses the reasons and highlights how preferreds can also offer some of the highest tax advantage income in the markets today.