New Year. New Decade. New War?
Author: Kevin McCreadie
January 13, 2020
If you are one of the thousands of people who downloaded the AGF Outlook 2020 digital booklet over the past month, chances are that you will have noticed several polling questions scattered throughout the pages asking readers for their take on what to expect over the next 12 months.
While surveying investor sentiment in this way is difficult to validate and, therefore, must be taken with a grain of salt, the results are no less interesting as an informal gauge of how those taking the time to respond see the new year unfolding.
Asked what the key issue facing investors will be in 2020, for example, most respondents picked trade disputes (38%) and recession fears (34%) from a list of pre-set answers that also included rising populism, political polarization and monetary policy.
Almost 70%, meanwhile, answered “no” to the question of whether a recession is imminent, and more than 90% believe stocks will outperform bonds this year
As for what investment themes resonate most with readers, the responses were relatively balanced with infrastructure (30%) and emerging markets (27%) slightly outpacing sustainable investing (24%) and alternatives (19%).
Given more choice to answer some of the polling questions, it’s unclear whether readers of our Outlook would have responded any differently than they did, especially as it related to key issues they may face.
At the time of publication in early December, the U.S. and China had still yet to reach a phase one trade agreement and while the economy was showing signs of renewal, investors spent considerable time in 2019 wringing their hands about the prospects of a recession.
However, we were to poll readers today, there seems little doubt that trade would take a backseat to the escalating conflict between the United States and Iran.
While markets have been resilient since the U.S. airstrike that killed Iranian General Qassem Soleimani earlier this month, they have been volatile. And with tensions heightened following Iran’s admission that it accidentally shot down a Ukrainian commercial airliner last week, further aggression by either country could have major implications for both stocks and bond markets as well as the global economy.
Ultimately, investors are starting the New Year off in much the same position as they ended last year. But instead of a trade war to contend with, they now have the threat of an actual war to potentially worry about.
Kevin McCreadie is Chief Executive Officer and Chief Investment Officer at AGF Management Ltd. He is a regular contributor to AGF Perspectives.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
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