Our inaugural Investment Outlook for 2020 will attempt to address three key challenges:
- Where we are in the global business cycle given the macroeconomic data and how this will affect the various traditional asset classes given current securities valuations.
- What are the major themes driving the Cryptocurrency market overall, and?
- Our investment hypothesis underpinning this as an uncorrelated asset class and attractive source of returns.
Key Macroeconomic Takeaways:
- Emerging Markets (EM’s) look to drive global growth in 2020 as trade tensions ease.
- Global trade and PMI data have reached an inflection point and we are seeing business and consumer confidence return globally.
- Equity markets in particular have been impacted by perversely low interest rates resulting in excessive cost cutting and share buybacks, resulting in valuations that have disconnected from the underlying corporate outlook.
Key Cryptocurrency Takeaways:
- The outlook for the cryptocurrency markets are overwhelmingly positive as institutional interest grows and exchanges are regulated.
- Facebook’s Libra is a game-changer and will drag governments into the
Cryptocurrency space as they risk being completely bypassed by business.
- Tokenised fiat currency’s will be driven by business’s providing consumers what they want as we move towards a cashless society.
- Regulation remains opaque and difficult to forecast, but moving in the right direction.
- Our strategy has proven itself as able to generate attractive risk-adjusted returns independent of, and uncorrelated with, the traditional securities markets and their drivers.
GLOBAL MACROECONOMIC OUTLOOK
We believe that a coordinated global economic recovery in 2020 is likely as we end an almost two-year downtrend in business confidence and global growth expectations driven by the US-China trade war and tightening monetary policy. For the first time since the beginning of 2018 we see both trade tensions and global monetary policy easing simultaneously. This, combined with the expectation of sustained easy monetary policy, leads us to believe that we will see a return in business confidence and further hiring, making the policy stimulus overall more effective.
Read the full article here, Investment Outlook 2020.