We are approaching the midpoint of a decade that has brought rising equity markets,
solid economic growth, and technological breakthroughs. Of course, this decade has also brought a global pandemic, the outbreak of wars, and societal challenges.
In this Year Ahead, we look at key developments that we believe will shape the next
stage of these “Roaring 20s,” including US political change, falling interest rates, and transformational innovation in artificial intelligence and in power and resources.
Since the start of the 2020s, global equity markets are up by around 50%, US nominal GDP has increased by over 30%, and US corporate profits are up nearly 70%. All that despite unprecedented global lockdowns, the outbreak of wars in Eastern Europe and the Middle East, and the largest spike in interest rates and inflation in decades.
The market and economic developments have led some to term the decade so far as the “Roaring 20s,” marked by high economic growth, strong market returns, and improving productivity.
We are approaching the decade’s midpoint, and the implications of the US election result are a focal point. A key question is whether US political change might extend or end the Roaring 20s.
The upside scenario would see lower taxes, deregulation, and trade deals adding to a positive market narrative built on solid growth and continued investment in artificial intelligence. The risk scenario is that trade tariffs, excessive fiscal deficits, and geopolitical strife will contribute to higher inflation, weaker growth, and market volatility.
As we consider a wider range of market outcomes ahead, the unpredictability of this decade so far should remind us of the importance of humility and market diversification. It should also remind us of the economy’s adaptability, the power of innovation, and the potential for long-term market growth.
In Year Ahead 2025, we highlight the investment opportunities and strategies to help investors capture opportunities and manage risks as the decade enters its next stage.
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