John
Tim
While we can’ t promise greater clarity, volatility measures are at lower levels than has been the case in recent years. The US economy is in a stronger starting position for 2025 than it was 12 months ago, also probusiness policies such as tax cuts are likely to have a positive impact upon the market.
Just a year ago, there were widely held concerns regarding a potential US recession and the impact of inflation. The position has changed dramatically and for most people these concerns are now in the‘ rear view mirror’.
Finally have there been any specific lessons learned from 2024 that will impact your role within the investment process?
John
A key point to focus upon is the co-behaviour of assets, which is critical for diversification and the management of multi-asset funds. Once again, the story for 2024 was the outperformance of US equities of both expectations and other global markets. This has now been the case for a number of years in the last decade, which has led some commentators to believe that this will continue forever and that the US equities are the only‘ game in town’.
We believe this not to be the case and continue to focus upon the importance of diversification both in terms of asset classes and geography.
Every year one becomes slightly more humble due to unexpected economic issues impacting previous forecasts. For 2025, the key question is whether previous economic theories will hold true following the structural shifts that have been seen in the last few years post pandemic. This in turn will then also impact thoughts concerning future asset class performance.
While it is understood that many incorrect
Chris forecasts will be made throughout the year, the key point is to endeavour to make more right than wrong forecasts. In actual fact a‘ hit rate’ close to 60 % would be considered very positive indeed. In addition to making correct forecasts, a key lesson learned is the importance of conviction in how the forecasts are implemented. For strongly held convictions, it is vital to be brave in order that the funds we manage, and in turn our clients, benefit from our correct forecasts.
KEY RISKS
The value of an investment and any income taken from it is not guaranteed and can go down as well as up, and the investor may get back less than the original amount invested.
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