As we enter the second half of 2024, the economy seems to be returning back to normal after the external shocks of the pandemic and the war in Ukraine that marked the start of the decade.

Patience is a must
Many of us tend to be hyperactive, a behavioural trait that has become noticeably worse with the rise of social media. We feel like we are missing out if we do nothing, especially when it comes to our portfolios and financial markets. The problem is particularly acute among asset management professionals. Many undoubtedly feel guilty if they do nothing. But we are precisely at a point where we feel there is no obvious opportunity in our asset allocations.

Let us summarise the reasons for this, while making it clear that our point of view is based on the fundamental principle that a portfolio is invested by default. In other words, the fallback position, in the absence of a strong reason to the contrary, is to normalise one’s risk budget close to one’s strategic allocation rather than taking refuge in risk-free assets. Remember that cash is a tactical asset, not a strategic one. This is exactly where we are now, and it has served us rather well in the first half of 2024.