Understanding underlying drivers and their consequences
Since 2014, Pictet Wealth Management has communicated through its yearly publication “Horizon” its 10-year return expectations across asset classes as well as its research into the key economic, political and market trends and factors driving those expectations.
This year, Pictet Wealth Management has developed a new initiative, called ‘Beyond Horizon’ to expand our understanding of the underlying drivers of economic regimes and their consequences for asset classes.
‘Beyond Horizon’ is a vehicle for examining structural drivers that have far-reaching and potentially massive consequences on our geopolitical, economic and financial environment.
Articles from ‘Beyond Horizon’
Catching the innovation wave
The investment benefits of creative destruction
6 October 2020
Innovation is a multifaceted concept that theory considers as a fundamental driver of economic growth. We further believe we are going through a period of intense technological innovation, whose effects will be teased out in the years ahead.
The current wave of technological innovation exhibits four main characteristics: it is disruptive, exponential, deflationary and global. It plays a big role in our expectations for economic growth and asset class returns. The impact of the current innovation wave has not done much to lift growth and productivity so far because it has simply been displacing existing industries without necessarily adding to aggregate demand. (...)
The great divergence
How to approach changing debt dynamics across the world
One striking feature of the years since the 2007–2008 financial crisis has been the rise in public and private debt. While the absolute level of debt is not a concern of itself, the fact remains that debt has grown much faster than GDP. Thus, average public debt in advanced economies rose from 70% of GDP in 2001 to 105% in 2019 and is expected to come in at 125% in 2021 as a result of covid-19, according to the OECD. (...)
The price of the future
Dealing with the impact of climate change
23 September 2020
Climate change is not new. The potential link between CO2 emissions and global warming was suggested as early as 1896 by Svante Arrhenius, a Swedish scientist. Levels of CO2 in the atmosphere began to be recorded by Charles David Keeling in 1958, laying the foundation for seminal scientific works that have firmly linked increases in global temperatures to greenhouse gas concentrations. And yet, only now are many investors truly waking up to the potential consequences of climate change. (...)