Our previous article—the first in a three-part series—provided overviews of five areas that have been experiencing tremendous growth through strong technological innovation or by leveraging advances in the internet and discussed each area’s key growth catalysts. We refer to these five areas as SCODI, which stands for:

  • Software as a Service (SaaS)
  • Cloud
  • Online retail
  • Digital payments
  • Internet of Things (IoT)

The world is racing toward universal connectivity. By 2020, the number of global internet users is projected to reach 4.1 billion, up 1.1 billion (37%) from 2015, and global Internet Protocol networks are expected to support 26.3 billion devices and connections by then—10 billion (61%) more than in 2015, according to Cisco Systems, Inc. With the soaring demand, five innovative areas have experienced tremendous growth that hasn’t yet shown signs of slowing. We refer to these five areas as SCODI.

Key takeaways:

  • The recent short-term trend whereby stock prices have not initially responded as favorably to earnings surprises is likely temporary. If a company’s share price doesn’t react to a positive earnings surprise and good guidance, that could be an indication that the stock is underappreciated and undervalued.

With contributions from Gabriel G. Diederich, CFA, Portfolio Manager; Brandon Pae, Senior Analyst, Municipal Credit Research; and Gilbert L. Southwell III, Senior Analyst, Municipal Credit Research

The U.S. Supreme Court ruled on June 21, 2018, that states may require online retailers to collect sales taxes.

Investors’ interest in outcome-oriented investing and strategies customized to their personal goals and values has surged in recent years. Environmental, social, and governance (ESG) investments have benefited from this trend. According to the Forum for Sustainable and Responsible Investment, rising interest in these strategies over the past decade has boosted ESG assets significantly—to $8.72 trillion by the start of 2016, representing a 33% increase over a two-year period.

Market conditions in 2017 were so calm that investors may have forgotten what it’s like to see stocks move markedly lower. So far, 2018 has been the year of rising volatility. Most long-term investors will correctly tell you that while the journey might be bumpy, what really matters is the destination: a little volatility doesn’t have to throw you off course when you’re pursuing your financial goals. 

With the potential for continued market volatility, what can the early February equity market correction teach us as investors? Are there lessons beyond the wisdom offered during major volatility swings like stick to your long-term goals? We think so. As investors who actively search the market for opportunities in any macro environment, we see value in maintaining focus on two variables: an investable company’s fundamental strengths and its plans to deploy those strengths for consistent growth. In this blog post, we offer a quick post-mortem on the recent correction, and discuss a potential way forward for volatility-aware investors in search of opportunities.