In a world where Volatility, Uncertainty, Complexity, and Ambiguity are ever-present and ever-changing, the act of investing is about assessing probabilities and payoffs, not trying to predict what will happen.

At Strategies Summit in August 2024, a diverse panel of asset class experts debated the implications of four medium-term scenarios. Now, practitioners need to re-visit their medium-term outlook for investment markets.

Looking ahead, eight risks to global GDP growth stand out. Investors will need to rethink their investment and allocation strategies to navigate an era defined by uncertainty and uneven growth.

Green bonds have outperformed conventional bonds for five of the last seven years and their potential for positive outcomes during central banks cutting cycles make them a compelling investment.

Supporters often say that a businessman like Trump or Musk will know how to put America's fiscal house in order. But the smart money says they have no idea what they are doing.

The economy played a critical role in the 2024 presidential race, creating the conditions not only for Donald Trump to trounce Kamala Harris and for the Republicans to gain control of the Senate and House but possibly also for a counter-elite to usher in a new power structure.

History is rhyming again. With the return of President-elect Donald Trump and a Republican Congress, the baseline supply chain policies that investors will have to deal with look a lot like those applied in the 2016 to 2020 period.

Since Plato's Republic, philosophers have known how demagogues and aspiring tyrants win democratic elections. The process is straightforward, and we have now just watched it play out.

While the global economy is on track for a soft landing over the next 12 to 18 months, high stock prices, recession risk, and political uncertainty cloud the outlook for equities.

Central banks believe that economies tend towards equilibrium. But Professor Steve Keen thinks differently. He argues that central bank models fail to capture the complexity of modern economies while faulty climate change models threaten the capitalist system...

In 2014, Thomas Piketty's book, Capital in the Twenty-First Century, reshaped the inequality debate. However his central argument – that capitalism inevitably leads to growing inequality – falls apart when looking at cross-country inequality.

Ethical blindness is one answer to the question "Why do good people do bad things?" Together, these two papers strongly reinforce the idea that ethical practice requires that we regularly hit the brakes and check our ethical blind spots.

At one extreme, the whole investment decision-making process could be turned over to AI - at the other, it can just be used in data collection. These two papers capture the challenges of integrating AI into funds management and financial advice processes.

What went wrong with capitalism? According to Ruchir Sharma, progressives are right, in part, when they mock modern capitalism as "socialism for the rich."

With polls suggesting that Kamala Harris has at least a 50% chance of winning next month's US presidential election, questions about her economic-policy agenda have come to the fore.

It seems plausible. A lack of research means inefficient pricing and lots of opportunities to find bargains, and inefficient markets are full of less skilled investors. Alpha is lying around just waiting to be collected.

Manufacturing reshoring by global multinationals is key to economic development in frontier and emerging markets. Understanding the shifting dynamics can be critical to investment decision-making at both the country and sector level.

The financial services industry has long embraced the potential of AI-based systems including robo-advice. These two papers review the psychological and relational dynamics that arise from "algorithm aversion".

This Research Spotlight focuses on the Brandywine Global Opportunistic Equity strategy, a benchmark unaware true value global equity strategy that has produced very strong alpha.

So far, financial markets have remained largely indifferent to the upcoming November US presidential election. In my view, the odds of a Democratic sweep are increasing, and investors would be wise to pay attention.

Short breaks can improve decision-making and overall performance. A 2023 study found that holidays "meaningfully improve" the accuracy of equity analysts' earnings forecasts.

With armed conflicts raging in Europe and Middle East, and the prospect of a US-China showdown over Taiwan, many investors believe World War III is increasingly likely. But the Forum's Visiting Fellow, Pippa Malmgren, thinks differently.

The free world faces two related threats. First, the likelihood of World War III is rapidly rising. Second, the creation of a coalition of law-abiding nations appears less likely. And investors anticipating significant interest rate cuts face disappointment.

Wetware-powered AI is changing the way we manage risk and uncertainty, including in financial markets. Its rise will also profoundly change how humans think about the nature of reality — in finance and more generally.

Read any book on Complexity Science and the first example of a Complex Adaptive System is the economy and financial markets. Complex systems exhibit "emergence" which means that the whole is always more than the sum of its parts.

Many Australians view the rise of western "populism" as irrational. But former Australian politician and immediate past Ambassador to the US, Arthur Sinodinos, thinks differently.

While the majority underperform, there are still many, many managers that do outperform their relevant index over long periods. The rewards for good manager selection are real and worthwhile - if you have above average manager selection skills.

Economists are struggling to reconcile their upbeat views on the US economy with the angst of average Americans. The key measures of economic performance are almost perfect. But voters continue to cite the economy as a top issue.

I was speaking to a new doctoral student whose thesis is on the role of risk profiling in the development of an investment strategy. This led us to discuss why risk profiling was important and the purpose of investment advice.

The Big Five model of personality traits remains the dominant framework in personality research. Increasingly, it appears that aspects of investor sentiment and decision-making can also be explained by Big Five personality traits.

Many commentators have noticed the positive correlation between bonds and equities over the past few years and announced the end of bonds as a useful diversifier - often claiming "The 60/40 portfolio is dead, long live alternatives!".

Capital markets believe that interest rates are indeed on a downward path. Regulators would do well to get ahead of the next speculative cycle while they still can.

With Australian insolvencies at a 25-year high and corporate debt defaults rising globally, many investors are hoping that central banks will significantly reduce interest rates. But Coolabah Capital's Chris Joye thinks differently.

Investors must pay close attention to emergent supply chain disruption events, including those caused by mother nature. Four real-world examples reveal both exposure and impact of weather-related disruptions.

Listening to central bankers, one would think the recent bout of high inflation was merely an excusable post-pandemic forecasting error made under extreme uncertainty. But this presumes a level of central-bank independence that is simply unrealistic.

Private debt has grown in popularity as an alternative source of debt financing, with the asset class tripling in size since 2008. This self-paced, two-hour online short course equips you with the expertise to navigate private debt investment confidently across diverse market conditions.

It is well-established that investors and service providers should take human behaviour into account when making financial decisions. These papers look at how two techniques drawn from psychology - financial nudging and financial mindfulness - can influence investor behaviour.

When evaluating investment performance, we generally acknowledge a fundamental distinction between skill and luck. This research paper looks at the concept of “moral luck” and finds that the outcome of an investment recommendation may shape others’ evaluations of both the skill and the morality of the investment adviser.

Equity investors should set aside their fears of a second Trump presidency and focus instead on the structural opportunities presented by decarbonisation.

If governments are to be held responsible for investment and unemployment, they must control monetary policy. And, while central banks strive to maintain the appearance of independence, they often do what governments want.

The dollar has strengthened sharply in recent months and a rising crescendo of apocalyptic financial talk threatens to spook markets. Can - and should - anything be done to head off the dollar's strength?

This Guide sets out a procedure to recommend financial products that are only available to Wholesale Clients including the method for classifying a client as a Wholesale Client and common misconceptions about providing advice to them.

We appoint active fund managers because we believe they will add value by outperforming the index, and we try to measure that value add as an indication of the manager's investment skill. But how good are the measures we use?

The idea that individuals are more sensitive to losses than to equivalent gains is critical in investment decision-making. Two recent papers highlight that loss aversion/tolerance is a more nuanced phenomenon than is commonly recognised.

Jonathan Pain, Author and Publisher of The Pain Report, is a regular key note presenter at Portfolio Construction Forum's continuing education programs. Over the years, he has debuted new investment theses and challenged delegates about how to build better quality investor portfolios...

Gold has returned to the international monetary system. Over 50 years ago, US President Richard Nixon "closed the gold window". But now, fiat money is being challenged and the price of gold has reached all-time highs.

Three articles provide us with insights into the impact that the growth in passive management has had on the performance of active managers; the risks taken by active managers and the general efficiency of markets; and, the behaviour of markets.

Three issues are key to deciphering what 2024-25 will hold for the US economy, which is now the sole major engine of global growth. I will stick my neck out and offer some illustrative probabilities.

The future state of the economy and markets depends, in part, on what people expect it will be. Understanding people's expectations, and how and why they form and revise them, has important implications for portfolio construction practice.

After 15 years of economic upheavals, from the European debt crisis to the Covid-19 pandemic and Russia's invasion of Ukraine, the European economy appears set to underperform in 2024. But are appearances deceiving?

At this year's China Development Forum - the highest-level annual meeting of senior Chinese policymakers and top CEOs, policymakers, and academics - discussion focused squarely on the risk of China falling into the middle-income trap.

In 1990, Towers Perrin started spruiking the modern-day investment mandate. I must admit the concept of making investment managers far more accountable seemed rather good. Unfortunately, it most likely left clients worse off.

With just about every equity index globally dominated by a handful of companies, indexed investors might soon discover they are overweight future failure.

We have entered a period of intensifying geopolitical rivalries and conflicts. If Donald Trump wins the US presidential election in November, the world will be even further destabilised.

Our Markets Summit program kicks off with a video retrospective of the key events of the prior year...

There's much to learn from history, but every time is different when it comes to markets. The backdrop for investing will require investors to identify how the outlook today intersects with our experiences of the past and where it differs.

This economic cycle will mean revert to a traditional business cycle - a cycle that may not exactly repeat but will rhyme with prior inflation cycles. Opportunities exist in global bonds in 2024 and 2025 no matter hard or soft landing outcomes.

Second term presidents tend to be more ideologically aggressive, since they are freed from the need to face voters again. Investors globally need to think through the implications of a second term for either candidate.

While investors need to be mindful of the potential risks posed by different stress events, they should largely ignore macro and geopolitical predictions when it comes to selecting companies to invest in. The discussion covered a range of investment topics, from inflation predictions to niche equity opportunities in mid-cap and emerging markets

Equity valuations are at attractive levels for most emerging markets but the lack of interest in emerging markets in general has led to extraordinarily attractive valuations.

Despite outpacing traditional fixed income and even exceeding long-run equity returns, some commentators argue that Private Credit represents emerging systemic risk. That is a fundamental misunderstanding.

Investors should explore opportunities beyond the ASX20, focusing instead on the Ex-20 index which provides exposure to Australia's future rather than its past.

Three investment experts offer and debate their high conviction thesis on a long-term, deep rooted structural change impacting markets over a decade or more.

There's no such thing as "normal" for supply chains. The challenges for 2024 and 2025 that echo the past include logistics network disruptions, geopolitical risks and the cash costs of environmental policies - which make investing in supply chain security more important than ever.

Global REITs have been overwhelmed by the rapid rise in interest rates, headlines about the demise of the office, and concerns over bank lending to commercial real estate. However, history is not repeating. The industry is in strong shape.

Market cycles show there is a clear anomaly in the Senior Secured Loans space with record setting yields and compelling risk-adjusted returns.

History shows investors should always expect the unexpected – which simply underscores the benefits of adding private debt to a portfolio.

For the last two decades, private equity has consistently outperformed the public market, through market cycles and with less volatility. In 2023, private equity continued to show superior returns in the mid-market. Looking forward, the outlook for is stronger.

Australia's residential vacancy rate is at a record low and net overseas migration at a record high. But, the banks can no longer participate in the market like they used to, providing greater opportunity for real estate private credit.

Higher than desired inflation is now structurally embedded in the global economy. The boom-bust inflation cycle of the 1970s gives a useful historical parallel, providing investors insight into the coming decade.

The technology sector has now eclipsed its all-time high relative to the S&P 500, exceeding its dot.com bubble highs. So this begs the question – is this a bubble and what is the risk of another tech wreck?

With heightened global geopolitical risks, reduced fiscal support from governments, a deflating Chinese property bubble, and an ongoing US commercial real estate crisis, 2024 is a year for investors to be nimble and tactical.

Our diverse panel of experts debated the high conviction propositions they heard during Markets Summit 2024 and the portfolio construction implications.

We are in an investment environment like that of the pre-GFC period. Bonds will offer higher levels of both income and diversification, within a multi-asset portfolio.

This paper provides a comprehensive review of the psychology of attention and its relationship to key economic concepts (utility, risk-taking, social preferences, and learning), and the emerging role of AI in the modern economy.

Much of current economic and markets thinking is rooted in the post-GFC era. Practitioners need to let go of that history and embrace the fact that four trends are fundamentally changing the long-term outlook for markets.

Contrary to wide opinion, globalisation is not "history" but is being reinvented. For investors, a less interconnected world has significant implications for corporate capital expenditure and country allocation.

I was amazed several years ago to learn that the class I was teching believed that 90% of a fund's returns are due to asset allocation. Having once been a major promoter of this myth, it is important I contribute to its eradication.

What a difference a year makes. In February 2023, investors were preoccupied by the risks of rising inflation, monetary tightening and recession. This year, the focus is on disinflation, monetary easing and economic growth.

Traditionally, these annual forecasts aim to predict near certainties. This year, the outlook seems a little clearer than it seemed in December 2002 – but not much.

Is there, as many predict, another financial crisis looming? The history of financial crises suggests that the preconditions are present. But this has been the case a few times since 2008. What is the reality?

Around this time a year ago, about 85% of economists and market analysts (including me) expected the US and global economy would suffer a recession. But the opposite mostly happened. One must approach any 2024 forecast with humility.

It's in the spirit of thinking differently and embracing uncertainty that I offer you this year's set of global developments to watch over the next five years.