After a blockbuster 2019 for bond returns, investors should moderate their return expectations while watching for VUCA events and tail risks, especially trade, Brexit and the US elections.

VUCA issues are going to increasingly drive market outcomes. Mapping out different scenarios is a must to check your biases as well as challenge your own, others' and consensus views, and generate investment ideas that help manage VUCA and target the right opportunities.

VUCA is alive and well. The environment requires a disciplined, risk-based approach that considers the direction of market risk appetite to identify the right assets at the right time.

Our diverse panel of experts debates which of the high-conviction propositions they heard during Markets Summit 2020 resonated most strongly, and which they disagreed with most, and the portfolio construction implications.

The current VUCA environment creates opportunities for investors to increase diversification and income in their diversified portfolios, using carefully selected, higher yielding parts of the credit market.

As the old certainties break down, the response from policy makers has been to stimulate economies. The liquidity provided is particularly evident in longer dated growth assets. In the context of the Australian market, Australian mid caps is the sweet spot.

With an ageing demographic seeking more stable outcomes, many investors have been steadily increasing allocations to infrastructure securities, to capture the attractive relative income and low volatility.

The world has checked into Hotel California – interest rates are failing to stimulate demand and monetary policy is less effective. Successful adaptation will require a re-think of traditional strategic asset allocation approaches.

Low inflationary outcomes and very low interest rates are expected to remain in place for some time. REITs have resisted the attraction of cheap credit and will continue to provide a safe haven.

Trade Wars, the US Election, Brexit 3.0, natural disasters and pandemic risks are causing fear and uncertainty in Australian equity investors. The key to capturing opportunities is to focus on what matters to long-term returns.

Practitioners should examine portfolios for slow or no growth equities, priced like bonds, whose attractions may be inundated by a wave of fiscal stimulus.

Investors are facing a "Code REDD" with reflation, election, duration and disruption all key themes. The reflation theme is favouring a rotation into more cyclical sectors, lower duration assets and lower rating bonds.

High household debt places Australia in a fragile position for further disinflation, implying that bond yields will remain lower for longer. Investors should look to accumulate bonds and ensure portfolios have an appropriate defensive allocation in anticipation of the next downturn.

The best response for investors pondering a future that is always VUCA is to ground their decisions in investment basics. In short, look for mispriced quality companies.

Investors can gain exposure to high quality real estate through global REITs, which offer exposure to sectors experiencing better growth prospects and benefiting from tech disruption.

Traditional metrics suggest equities appear overvalued, but other factors argue against this and indicate a sustainable equity advantage.

The US-China trade deal was supposed to settle global trade uncertainty in 2020. Nothing could be further from the truth. Diversified supply chains are vital to minimising VUCA risks into the 2020s.

Many of the discussions at Davos this year revealed that global elites are struggling to respond to important economic and environmental challenges, in a highly volatile, uncertain, complex and ambiguous world.

Financial decisions are among the most important life-shaping decisions we make. Two recent research papers provide further evidence as to how practitioners can help improve clients' financial decisions.

Sharpe proposed that active investing must be a losing pursuit in aggregate. This paper takes a critical look at that proposition, and whether it is worthwhile considering using active fund managers.