Roaring 20s: The next stage

Since the start of the 2020s, global equity markets are up by 50%, US nominal GDP has increased by 30%, and US corporate profits are up nearly 70%. All that in spite of unprecedented global lockdowns, the outbreak of wars in Eastern Europe and the Middle East, and the largest spike in interest rates and inflation in decades.

These market and economic developments have led some to term the decade so far as the “Roaring 20s,” marked by high economic growth, strong market returns, and improving productivity.

We are now approaching the midpoint of the decade, and the implications of the US election result are a focal point. A key question is whether US political change might extend or end the Roaring 20s.

Lower taxes, deregulation, and trade deals could all add to a positive market narrative built on solid growth and continued investment in artificial intelligence. At the same time, trade tensions, excessive fiscal deficits, and geopolitical strife could contribute to higher inflation, weaker growth, and market volatility. At the very least, higher tariffs complicate the outlook for key markets like China, the rest of Asia, and Europe. We also see a considerable risk that more damaging universal duties will materialize.

As we consider a wider range of market outcomes ahead, the unpredictability of this decade so far reminds us of the importance of humility and diversification, but also the adaptability of the economy, the power of innovation, and the potential for market growth.

In Year Ahead 2025, we highlight the investment opportunities and strategies to help investors capture opportunities and manage risks as what has been a Roaring 20s enters the next stage.

Written with Mark Haefele, our Chief Investment Officer.

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