2025 investment outlook: After the landing

The 2025 investment outlook suggests a favorable environment for risk assets due to anticipated monetary policy easing, with central banks aiming for a "soft landing" that lowers inflation without triggering a recession. However, there are risks of policy missteps that could lead to global growth falling short, prompting further rate cuts to stimulate economies. The base case projects moderate growth across major economies, with the US expected to outperform due to strong demographics and productivity.

The eurozone faces structural challenges and potential trade tensions, but ECB rate cuts could support growth. The UK shows resilience, with potential growth boosts from policy changes, although fiscal challenges persist. Japan's economy may benefit from wage growth despite currency volatility, while China could see modest growth supported by policy stimulus. Emerging markets are likely to benefit from global monetary easing and US dollar softening, although domestic factors will play a crucial role.

Investment strategies favor cyclicals, smaller caps, and developed ex-US stocks, with opportunities in bonds, real estate, and industrial metals. Alternate scenarios include a defensive approach if growth undershoots or a "risk on" strategy if global growth exceeds expectations. Political uncertainties, particularly with a new US administration, could introduce volatility and inflationary pressures. Fiscal policy and government debt levels remain areas of concern, potentially impacting growth trajectories. Overall, a balanced approach that considers potential risks and opportunities is recommended for optimal investment outcomes.