The global macro environment remains anything but normal, and investors will have to navigate a volatile and challenging path over the next five years. Disruption and uncertainty are likely to persist, and deglobalisation will widen rifts in the global economy. A thoughtful, long-term focus should help investors along that challenging path. These are some of the key takeaways from PIMCO's recent annual Secular Forum, with our investment professionals, guest speakers (see below), and Global Advisory Board gathered in person for three days of intensive discussions.
Beginning with a thoughtful review of our priors, we felt that the themes we discussed in our 2021 Secular Outlook, "Age of Transformation," still very much resonate today. We anticipated a more uncertain and volatile macro landscape, and we identified green, digital, and social transformations as key drivers of disruption. We expected shorter growth and inflation cycles with larger amplitudes and more divergence across countries. All of these themes still ring true.
However, the obvious task at hand was to factor in the massive disruption that we did not anticipate last year: Russia's invasion of Ukraine in February and the horrific war that has been waging since, as well as the far-reaching economic and financial sanctions and other policy responses by most Western democracies. In thinking though the consequences of these events for our investment thesis, we found it useful to distinguish between our near-term cyclical horizon (six to 12 months), the medium-term horizon (one to two years), and our longer-term secular horizon of five years and potentially beyond.
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