Citi Global Wealth Investment Mid-Year Outlook 2022: Worst of Price Inflation Passed, Forecast 3.5% in 2023
1st July 2022 | Hong Kong
Citi Global Wealth Investment has released the Mid-Year Outlook 2022: Investing in the Afterglow of a Boom, provide an overview of the global investment outlook in 2022 (A new world order, asset class outlook, Citi asset allocation) and key themes including holding dangers of excessive cash, return of bonds, alternatives to generate portfolio income, key trends, United States & China differences, rise of Asia, cybersecurity, fintech revolution, alternative investments, green investment and supply shortages. Citi: “The first half of 2022 has been especially challenging for investors, leading to increased uncertainty and concern. The global economy has endured a series of shocks over the last few years as COVID shutdowns, unprecedented stimulus, supply chain seize-ups and Russia’s invasion of Ukraine have all created significant challenges. The most obvious result of these shocks is inflation, even as the economy slows and reduced stimulus hits consumer spending. Citi believes the worst of U.S. consumer price inflation has already passed, with a decline to around 3.5% likely in 2023.” Summary version, short videos and other materials can be accessed here.
“ The worst of U.S. consumer price inflation has already passed, with a decline to around 3.5% likely in 2023 “
Citi Global Wealth Investment Mid-Year Outlook 2022: Investing in the Afterglow of a Boom
Citi Global Wealth Investments released its Mid-Year Outlook 2022 report: Investing in the afterglow of a boom. This biannual report sets out Citi’s outlook on rapid developments in the global economy, markets and geopolitics, including the rise of Asia. Citi Global Wealth’s full Mid-Year Outlook 2022 report, a summary version, short videos and other materials can be accessed here.
1. Overview
- A new world order: How should I invest now?
- The long-term outlook for asset class returns has improved
- Investing in the afterglow of a boom
- Our positioning
2. Thematic updates
- Beat the cash thief! The perils of holding excess cash
- Beat the cash thief! Bonds are back
- Beat the cash thief! Alternative paths to portfolio income
- Harness the power of unstoppable trends
- The rise of Asia: Accelerating G2 polarization
- Cyber security: Defense for data and portfolios
- The fintech revolution has far to go
- Alternative investments in the world of digitalization
- Greening the world: A new level of urgency
- Overcoming supply shortages
Citi Positioning & Opportunities
David Bailin, Chief Investment Officer and Global Head of Investments for Citi Global Wealth:
“Across developed economies, consumer prices have been rising faster than they have in decades. In response, policymakers are withdrawing the fiscal and monetary boost they provided when COVID struck. The U.S. Federal Reserve is leading the way, signalling some of the biggest annual interest rate rises in its history.
We think that the Fed’s actions will determine if there is going to be a recession or sustained growth. The economy can stand higher rates, but not an abrupt withdrawal of liquidity. Inaction on the part of investors is like market timing. It rarely works. We believe that a fully invested portfolio has the potential to improve outcomes across difficult macro environments, like the one facing investors now.”
Steven Wieting, Chief Investment Strategist and Chief Economist at Citi Global Wealth Investments:
“We’ve adapted for a world of scarcity, allocating capital to produce more of the commodities of greatest need. We’ve made important adjustments in our tactical asset allocation in 2022 to position for the risks and potential opportunities that we see ahead, believing the global economy can weather the storm. Mid-way through 2022, many investors are frozen in a state of indecision.
Ultimately, being fully invested in a globally diversified allocation remains the best course of action, as keeping portfolios static, positioned for conditions in previous years remains a top risk for investors. Our view is that this is a time for taking positive action, while avoiding certain costly mistakes.”
Ken Peng, Head of Asia Investment Strategy at Citi Global Wealth Investments:
“It won’t be a smooth ride but China is turning around. Meanwhile, we believe US-China polarization will benefit Southeast Asia economies, as they stand to win more business from many developed nations diversifying their supply chains away from China. At the same time, we see the region doing more business with China.
Given Chinese equities’ distressed valuations, we see rebound potential this year. Among the areas we find most attractive are those linked to economic reopening, green energy and technology more broadly. Across Southeast Asia, we favour investments linked to tourism, natural resources and industrial diversification away from China.”
About Citi Global Wealth:
Citi Global Wealth is an integrated wealth management platform that delivers a total wealth solution to clients across the wealth continuum, with integrated advice and execution across both their assets and liabilities. Citi Global Wealth serves ultra-high-net-worth individuals and family offices through Citi Private Bank, operates in the affluent and high-net worth segments through Citigold® and Citigold Private Client and captures wealth management in the workplace through Global Wealth at Work. Citi Global Wealth provides clients with a leading investment strategies platform, which delivers traditional and alternative investments, managed account strategies, best-in-class research and investment guidance for all clients.
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