Mid-Cycle Investing: Time to Get Selective

Pimco
By July 20, 2021 09:21

Mid-Cycle Investing: Time to Get Selective

SUMMARY

  • The global economy is in a mid-cycle expansion, following peaks in policy support and growth, and what is likely a transitory spike in inflation. We expect global growth to moderate to a still abovetrend pace in 2022.
  • Growth-oriented assets, such as equities and credit, tend to perform well in a mid-cycle environment, but with significant differentiation. Sector and security selection remain crucial. Within multi-asset portfolios, we generally prefer equities over other risk assets based on relative valuations.
  • Looking beyond the business cycle, we also assess the potential impact of longer-term disruptions. Trends toward sustainability and evolutions in technology present investment opportunities as well as risks.

Pimco
By July 20, 2021 09:21

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