In his latest article for Forbes, George Schultze discusses why, amid the Fed’s slow-but-steady tightening and the U.S. government’s slow-but-likely fiscal expansion and tax cuts, he expects the U.S. economy to keep growing. Additionally, George delves into why lower default rates do not necessarily translate into fewer distressed securities opportunities. Be sure to read the full article for more insights.
Here’s an excerpt from the full article:
“Many investors have recently questioned the relevance of active money management when lower-cost passive strategies, such as ETFs and index funds, have outperformed significantly in the last few years. However, active investment will always be relevant because it can provide non-correlated return diversification, a benefit that can be particularly important now after so many years of good market performance. In fact, the more money that flows into passive strategies, the more likely it is that new market inefficiencies will develop that can be exploited by smart active managers. This is particularly true for distressed securities investing, a specialized discipline which simply cannot be replicated through passive management. At its heart, distressed securities investing is the ultimate value investment strategy and one of the few places left where inefficiencies, such as those created by forced sellers, misunderstood litigation, or complex restructurings, can yield event-driven profits.”
You can read the rest of the article in full at Forbes.