CS Investment Outlook 2021 - Living forward.

06 February 2021
CS Investment Outlook 2021 - Living Forward. 1/1

Once our world emerges from the shadow of the COVID-​19 pandemic, it will only be natural for us to “live backwards” as we examine how this challenging period affected our lives. As individuals, we can all recall how it felt to see our cities empty out as the world went into lockdown, as well as our worries about what would happen to our families and friends. What is for sure is that none of us will ever forget that 2020 was the year when we were all confronted with a global pandemic of a deadly virus.

The crisis was also an extraordinary experience for investors as it pushed the global economy into its deepest recession since World War II. Equity markets plunged in late February and March, then rallied strongly in the subsequent months thanks to unprecedented support from central banks and governments.

This publication is not about the past, however, but looks ahead at what we expect will shape investments and markets in the new year. Investment conditions are tighter and the search for yield and returns has become trickier. Now is the time when increased discipline is needed to overcome our natural bias to look to the past for guidance. Sound judgement grounded in a rigorous analysis of the present combined with perseverance in pursuing an investment thesis can make investing highly rewarding, as we demonstrated during the height of the crisis, when we decided to go against the tide and began buying equities in late March.

As we move forward, the pandemic will continue to occupy us in 2021. Governments will have new COVID-​19 outbreaks to battle, and will need to distribute a vaccine to their population once it becomes available. Additionally, people and businesses will need to adapt to what we believe will be permanent changes in the way we work, learn and live.

    

Finally, while economic growth should normalize after the pandemic-​induced shock in 2020, there are risks that still need to be monitored carefully. In the following pages, we explore the outlook for the different asset classes and the global economy in 2021.

Beyond all the unprecedented events of the year we are leaving behind, a far greater challenge awaits as capital shifts to addressing the environmental and societal trends that the pandemic has catalyzed. Over the past 18 years, Credit Suisse has been very active in the area of sustainable and impact investing. We believe investors have a clear role to play in the transition to a more balanced and sustainable world. This will require a shift in mindset and approach, which is already underway as investors call for closer alignment of purpose and profit when deploying their investment capital.

We strive to be in a position to help our clients accelerate these trends. Our major initiatives in this area include the Supertrends, our long-​term investment themes that focus on societal change, such as Millennials’ values and Climate change – Decarbonizing the economy. We have also launched funds targeting some of the United Nations’ Sustainable Development Goals.

Enabling our clients to invest with sustainability and impact in mind is among our bank’s top priorities going forward, and you will continue to hear more about our efforts on this front as we put it at the heart of our investment offering. I am sure that the year 2020 will be a defining moment in our lives, and I reflect upon a quote from the Danish philosopher Soren Kierkegaard in which he says life can only be understood backwards, but it must be lived forwards.

 

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