KGI Market Outlook for 2025
KGI recently released its 2025 Market Outlook, covering regions such as Mainland China, Hong Kong, Taiwan, the U.S., Singapore, and Indonesia. Looking back at this year, we’ve seen the U.S. economy reach a balanced risk point between employment and inflation with the cooling of inflation and labor market conditions. As we anticipate Trump’s return to the White House, his policy proposals will likely influence global economic trends and medium to long-term interest rates. In China, we’ve observed a lack of confidence in domestic investment, especially with the potential threat of increased tariffs from the U.S. In response, China plans to implement measures to tackle these challenges.
For the upcoming year, we suggest following the “ACE” strategy:
– Alternatives: Diversify into assets like gold and cryptocurrencies that have lower correlations with traditional stocks and bonds.
– Credit Selection: Focus on high-rated bonds, specifically in the corporate bond sector for income potential.
– Elite Stocks: Favor large-cap stocks, particularly from the U.S. and Japan, and keep an eye on sector rotations.
Kenny Wen, Head of Investment Strategy at KGI, advises, “When considering asset allocation for 2025, it’s important to look at the global economy and geopolitical factors. The ACE strategy – Alternatives, Credit Selection, and Elite Stocks – offers a way to diversify holdings, potentially boosting portfolio performance.”
In terms of macro and the U.S. market, experts anticipate a slower economic growth rate in the U.S. compared to what the current market predicts. While the Eurozone and the UK recovery were weaker than anticipated, year-on-year growth trends show improvement. The performance of these regions may still lag behind the U.S., but the gap is narrowing. In China, the market situation remains uncertain, especially in the face of potential tariff escalations.