It’s been a daunting start to the year. While the outlook for the economy and markets remains unclear, it’s not all bad news.

Richard Dunbar, Head of Multi-Asset Research, and Jeremy Lawson, Chief Economist and Head of abrdn Research Institute, discuss what investors can expect for the rest of 2022.

Here are some of the key takeaways:

1. Recession is likely within the next two years for advanced economies, but China stands out as an economy that will pick up steam as it emerges from its zero-Covid lockdowns.
2. One possible scenario sees global supply chains recovering faster than expected, inflation losing steam, wage-growth moderating and less aggressive monetary policy tightening – leading to a soft landing.
3. Stock selection will become increasingly important; residential property and logistics may be better placed to weather the coming months as other markets succumb to weak investor demand.
4. We still favour the dollar for its portfolio diversification benefits, even though there are fewer valuation opportunities than at the start of this year.
5. We prefer emerging market equities, especially those in Asia, as well as selected government bonds. More caution is needed for corporate bonds, where we prefer high quality over high yield.

Now watch the video to find out more: