As we enter 2016, investors are faced with many sources of uncertainty in the economic and political environment, from the international refugee crisis to China’s rapid deceleration. Despite these volatilities and conflicts, investors can look forward to substantial opportunities in 2016—if armed with the right strategies.
In many ways, the investment environment at the start of 2016 is not radically different to that faced at the start of 2015. Our 2016 themes reflect this view – we have retained (with a slight shift in emphasis) two of the themes discussed in last year’s note, and added two “new” themes that capture what we believe to be important changes in market conditions.
The ideas outlined in this paper represent our observations on the challenges and opportunities present in the current investment environment. We provide these ideas with the aim of provoking useful discussion, but the appropriate response at an investor-level will be heavily influenced by the specific beliefs, objectives, and constraints of each investor. We look forward to helping investors adapt their strategies as new risks and opportunities arise over the course of 2016.