How to defy the medium-term uncertainties?

25/25/25/25 portfolio

2022 has certainly been the worst year ever for traditional portfolios (aka 60/40 portfolios) as both equity and bonds plunged due to the deteriorating macro and geopolitical environments, the rise in inflation and the subsequent tightening of global monetary policies.

Looking forward in 2023 and beyond, some investment themes and approaches seem attractive. Let us explore a few of them. From TINA (There Is No Alternative) to TIC (There Is Carry). From a low interest rate environment where equity and growth are the only viable alternative, to an environment where yields are back in fashion thanks to higher interest rates and credit spreads. Rates are now expected to gradually stabilise in 2023, as the bulk of the adjustment triggered by inflation and central banks has probably already been factored in. Inflation is now expected to gradually sl...