The economic environment for the capital markets is subject to change as we speak. About one and a half years ago, the global economy shifted from recovery to boom, which was very advantageous for the markets. The features were strong, broadly based economic growth, low inflation, very supportive monetary policies, good earnings growth, and limited price fluctuations on the markets. We have now started leaving this best of all worlds (“Goldilocks scenario”) in more and more categories.
This week we held our monthly Investment Committee meeting. Although only little has changed with regard to the overall economic picture, we were having a few interesting discussions that we would now like to share with you.
The global economy is growing moderately, inflation is low, and the monetary policy is loose. This environment supports many asset classes from bonds to equities. The political uncertainty has been absorbed rather well so far too. Will this situation last?