You have to have some sympathy for those strategists working at asset managers and investment banks who spent the tail end of last year writing lengthy outlook pieces for 2020. Although the tomes produced always have an inbuilt redundancy; the onset and spread of coronavirus (COVID-19) has upended all forecasts in a particularly dramatic and rapid fashion.
For investors the staggeringly swift reshaping of the prevailing investment narrative should have served as a sharp reminder of the futility of short-term forecasts. The complex and adaptive nature of financial markets means that making predictions about the near future with any level of specificity is an utter folly.
Unfortunately, as investors hastily recalibrate their market expectations they have not become more circumspect about forecasting imponderables – quite the contrary. As the perceived risk has heightened there seems to be an increased production of speculative prognostications. Most asset managers are now producing their own viewpoints on the potential ramifications of the virus. There is puzzling need for detailed opinion pieces from financial market practitioners about an incredibly uncertain topic about which they have no specialist knowledge.
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