It’s not always the economy

LAST year was humbling for economists and investment strategists alike. It began with an “imminent” recession and ended with equity markets near all-time highs.

Historic rate hikes fuelled a compelling narrative that, at best, anticipated both a weak economy and disappointing returns. To be sure, legitimate concerns underpinned this narrative. Post-Covid-19, amid resurgent inflation, the world was still emerging from an era of “unprecedented everything”.

But the inherent pressure to take a stance on the economic trajectory led many investors to find comfort in collective concern and embrace the prevailing storyline.