Looking for a compass in an economic storm

Singapore

FEW investors are looking forward to 2019. The volatility that we have experienced in markets over the latter part of 2018 and the overwhelming sense that we are late-cycle in terms of both the global economy and the post-crisis boom in asset prices have combined to create a general atmosphere of foreboding.

In some ways, this is nothing new. Over the last few years the market has, as it normally does, climbed a wall of worry. But the focus on capital preservation and the avoidance of volatility has been uncharacteristically pervasive in this cycle. The dominant market narrative has steadily shifted from one of secular stagnation to a sense that we are in a period of normalisation where a level of underlying economic growth can be sustained without central bank stimulus.