Given the upheavals of the past year, and the uncertainties of the year ahead, it’s an especially critical juncture for investors to understand the market perspectives in 2022 in order to make informed investment decisions.
As the world "gets back to business" in 2022, most people hold a cautiously optimistic outlook. From the perspective of global macro-economic outlook, the COVID-19 pandemic will continue to influence economies, markets and the actions of central banks in the year to come.
The supply-chain bottlenecks that are plaguing much of the world these days are unlikely to be resolved quickly. Inflation will be the main concern for central banks when making out their monetary policy in 2022. Rising inflation and bond yields will present more opportunities for investors in more flexible fixed-income funds and in strategies focused on inflation mitigation.
Investors should consider seeking out quality, fundamentally sound companies that are no longer drowned out by the pandemic, as a growing divergence has emerged between well-managed companies and those with poor management and shaky fundamentals.
Equities continue to offer the best opportunities for investors over the next six months or so. This is due to continued stimulative policies in developed countries, including negative real interest rates and fiscal measures.
China may also remain attractive for investors. However, Covid-19 lockdowns and challenges in real estate markets could lead to a prolonged slowdown in economic conditions. This could create headwinds for commodity prices, as China is the largest consumer of raw materials.
For investors, it is wise to start the year by reconfirming your commitment to maintain a global investment portfolio that’s highly diversified across and within asset classes. One great way to maintain discipline in volatile markets is to engage with your trusted advisors to craft and design your investment strategies. Cedrus Investments is here to help. You can always rely on our support to keep on course amid whatever winds may blow in the year ahead.
Cedrus Investments is a global boutique investment firm founded by Mr. Rani Jarkas more than 18 years ago, specializing in Asset Management and Financial Advisory Services. Mr. Jarkas is a highly experienced and accomplished financial services executive, with over 23 years of international banking experience.