Secular Outlook 2024: investment trends for the next decade

It is easy to get carried away with the ups and downs of daily markets and can be dangerous for investors to focus too much on the short term. While the news flow does influence markets, it is equally important not to lose sight of the big picture that is shaping long-term #investment #trends.
In the latest fireside chat, our Group CIO Yves Bonzon takes a step back and discusses the key investment trends that will matter for the years to come.
CHAPTERS
00:00 Intro
01:29 Understanding long-term trends
02:58 Every decade is different
04:22 The great normalisation
07:42 Reshoring will be very targeted
11:29 The results of the poll
12:19 Geopolitics: don't get distracted by the news
17:34 Artificial intelligence
20:19 Energy transition
23:52 US equities
29:12 Swiss equities
31:43 China faces balance sheet recession
33:32 The rise of passive investing
40:07 Will Europe catch up with the US?
42:21 The risks of government debt
46:14 Digital assets
KEY TAKEAWAYS
• The primary driver of a portfolio return over time is the strategic #assetallocation. In order to make the right choices, it is crucial to understand the structural forces at work in the system.
• What worked the previous decade is unlikely to work the next decade.
• The transition from neoliberalism towards state-sponsored capitalism, a notion we introduced in 2019 for the first time, is now in full swing.
• Fiscal dominance paves the way for a normalisation of interest rates at a faster-than-expected pace.
• We face a multipolar world, where strategic #reshoring activities driven by national security concerns are gaining importance, facilitated by active fiscal and industrial policies.
• The US needs China and China needs the US. We are confident that pragmatism prevails between the two countries.
• Investors should not get distracted by news headlines about geopolitical events, since they mostly have a limited impact on long-term market trends.
• We might be on the cusp of an innovation super cycle driven by the convergence of multiple technologies, including generative artificial intelligence.
• The green transition is more advanced that we would have believed 12 months ago, resulting in declining asset prices.
• We expect macroeconomic volatility to remain higher than in the previous decade, fueled by the new geopolitical situation.
• We maintain the view that the ‘tail is wagging the dog’, i.e. given the exponential value of financial assets in relation to global gross domestic product, changes in asset prices still disproportionally influence the real economy.
• The fact that money has a price again is a fundamentally healthy development. When money is cheap, or even free, there is a risk that economic agents will be less disciplined in how they allocate capital.
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Find out more about our Secular Outlook 2024 and download our brochure here: www.juliusbaer.com/en/insights/market-insights/cio-views/secular-outlook-2024-the-great-normalisation/

[@ggttuuxx]

One main factor missing from What Happened is: "Massive pro-cyclical money printing even in the face of full employment." This has led to the under-expected, massive equity re-rating of the hottest sub-sub-sector. A.k.a. "magnificent seven". This will also lead to the coming re-rating of equities when the sugar high turns into a sugar low. (Or perhaps not, if the massive money printing is topped up by another irresponsible even more massive printing, which is wrong, but cannot be discounted when under a selfish-politician-led regime.)