Author: Neil Dwane, Global Strategist, AllianzGI In our mid-year outlook, trade and politics are top challenges
After a strong start to 2019, the markets abruptly turned volatile. The global economy looks increasingly fragmented, and our mid-year outlook calls for more unease over trade tensions and politics. While there are no easy answers, we suggest investors focus on ESG, hunt for income and invest actively.
Key takeaways:
- US-China tensions could hurt the stocks of large American tech firms that were already under fire for privacy issues, but cyber-security and
defence stocks may benefit from rising geopolitical hostilities; - With political uncertainty high, investors might consider pivoting towards income-generating investments – but with low to negative yields on many bonds and cash, the biggest risk is still to take no risk;
- Use ESG factors to help manage risk and drive performance potential; sustainability is becoming increasingly mainstream for a reason;
- Take an active approach to investing: watch out for high-priced assets and take contrarian positions when attractive valuations can be found.