Resilience after all
Unforeseen and surprising events have shaped 2019, and we have little doubt that they will impact the world in 2020 as well. In light of such uncertainty, it is of utmost importance for investors to build resilient portfolios.
We expect only sluggish global growth in 2020 of 2.5%, almost unchanged from 2019, but a recession continues to look unlikely given supportive macro policies. De-escalation on the trade war front will be key.
Main asset classes
Most asset classes showed a strong performance in 2019. Investors should not expect to see this feat repeated in 2020, although financial assets will likely continue to benefit from generally low yields.
Alternative investments have become increasingly established as a building block of portfolios, particularly in today’s world of low-for-longer interest rates and yields. They are appreciated not only for their diversification benefits, but also for providing stability to portfolios.
Investment strategy 2020
Now that interest rates around the world have reached record lows or slipped into negative territory, even risk-averse investors will need to buy higher-risk assets to generate positive returns. We see a number of opportunities to generate additional returns without taking on too much risk.