The key points are as follows:
- After being in a long term, or secular, bear market since March 2000 that has resulted in very poor returns for investors, global shares led by the US are likely at or close to entering a new secular bull market.
- However, returns are likely to be constrained relative to the last secular bull market, which started in the early 1980s, as valuations are not as attractive, the tailwinds from falling inflation and rising profit shares will be absent and global growth is likely to remain more constrained.
- Against this backdrop asset allocation will remain critically important, macro economic developments will remain a key driver of returns and it will remain important to focus on assets providing decent income flows and/or good growth potential such as commercial property, infrastructure, quality shares and emerging market assets.
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