It has not been an edifying start to the year for financial markets. Donald Trump has been making everyone nervous – from those who believe his tax cuts will generate inflation and prompt swift and unwelcome interest rate rises; to those who believe his tariffs threaten to disrupt global trade and make life difficult for companies doing business across the world.
In this environment, it is difficult to discern trends. While the ‘growth’ story appears to be over, it is not clear that it has yet been replaced by ‘value’. At the same time, while the US markets look too expensive, it is not clear that the other developed markets can offer the same growth or resilience. Reliable growth areas, such as technology, no longer look quite so reliable. In short, this is an environment in flux.
But investors still need to look somewhere. That may be emerging markets, as Neptune’s Ewan Thompson or Jupiter’s Ross Teverson argue, or by exploring unloved parts of the bond markets, as Janus Henderson’s John Patullo suggests. Multi-asset, done right, potentially presents a solution and Square Mile discusses its critical success factors. There are opportunities in every market – Asia, Europe, even the unfashionable UK – and BlackRock, Baillie Gifford and Investec explore them here.
In other words, there is plenty still to play for, even if investors need to be a little more discerning. The road may be bumpier – and markets won’t do the heavy lifting – but global growth continues apace and there are still opportunities.
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