BlackRock – Global Outlook, 2024

The new era of increased macro and market volatility has led to greater uncertainty and variation in investment returns. BlackRock believes that a more active approach to managing investment portfolios will be more rewarding in this environment. This is a significant shift from the previous strategy of relying on one-and-done asset allocations that worked well during a period of stable growth and inflation known as the Great Moderation. BlackRock sees this as an opportunity to take control and seize the opportunities that the new regime presents. The authors, Philipp Hildebrand, Jean Boivin, Alex Brazier, and Vivek Paul, emphasize the importance of context in understanding the current landscape. They highlight the structural shifts and mega forces shaping the market, such as digital disruption, the low-carbon transition, and a fragmenting world. They suggest that managing macro risk, steering portfolio outcomes, and harnessing these mega forces will be key strategies for success in the new regime. They also note that higher interest rates and tighter financial conditions define the new era, and highlight the need for a more active and deliberate approach to portfolio risk. They expect to deploy more risk in the coming year. Overall, they argue that investors should not rely on autopilot but should take control of their portfolios to navigate the opportunities and challenges of the new regime.