Home 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.
Even if the US-China trade war eases and Brexit uncertainty diminishes, the year 2020 is unlikely to be entirely smooth sailing: a polarized US presidential campaign, margin pressure, high corporate debt, and fewer interest rate cuts by the major central banks – not to mention unexpected political developments – are likely to sporadically test investor nerves.
Overall, however, we believe that the global economy and risk assets will continue to show considerable resilience in the face of these challenges. This is the message that the title of this year’s publication, Resilience after all, is intended to capture.
While we expect rather subdued economic growth in 2020 and returns that are generally lower than in 2019, a serious market downturn or even financial crisis seems unlikely to us. We observe a number of imbalances in various economies and sectors, but none of them seems serious enough to trigger such a crisis. Conversely, technological progress remains in full force and, importantly, policy makers will continue to provide support.
The following pages lay out the key elements of the Credit Suisse House View for 2020. We have strived to provide a consistent and well-structured guide across the most important asset classes, markets and sub-segments. It suggests that investors who hold well-diversified portfolios, tilted toward areas of extra return, should continue to garner healthy returns. Furthermore, sustainability is increasingly relevant for investors, as it has already become a matter of great importance for voters and consumers around the world.
We hope you will find this publication helpful and wish you a successful year ahead.
Global economyWe 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 classesMost 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 investmentsAlternative investments have become increasingly established as a building block of portfolios, particularly in today’s world of low-for-longer interest rates and yields.