Market themes for the next 12 months

11 January 2019

A year ago, the return expectations on liquid investments were very low, US monetary policy was tightening and the mood of investors was, on average, very positive concerning the new year’s investment outlook. As the set-up was not especially positive for investors, the positioning of our portfolios was cautious. Now, following the autumn’s market plummet, the return expectations on equities and corporate bond investments have risen and an increase in key interest rates is no longer self-evident. This increases the likelihood that this year will turn out to be better for investors than last year.

There are still concerns. The slowing down of economic growth weakens the accuracy of economic and earnings forecasts and raises the possibility of monetary policy errors, at the same time as the global economy’s debt level is record-high. The trade war between the US and China creates disturbances in global supply chains and reduces companies’ investment appetite in an already uncertain environment.