Investment scenarios and prospects

3 February 2016


Kairos recently held its annual event for clients at the Principe di Savoia Hotel in Milan.

Paolo Basilico, Chairman and CEO, noted that, in the difficult year just ended and complicated start of 2016, Kairos confirmed its ability to protect its clients’ assets by pursuing an effective defense strategy. Moreover, clients continued to place their trust in the Group and substantially contributed to its growth again in 2015.

Kairos will rise up to a series of challenges in 2016, including its planned public listing, which should give the Group even more stability and enable it to gain additional competitive edge. With this new structure, the Group will manage market volatility and the fragmented economic scenario, in which geopolitics play an increasingly important role. Special guest Ian Bremmer, founder and Chairman of the Eurasia Group, explained how crucial it will be to consider the impact of geopolitical developments on markets, as he reviewed the main events that have shaped current history.  Indeed, 2016 is expected to be a difficult year for global growth and many delicate issues will need to be faced.

This topic was discussed during the round table with Kairos managers, and while it is was clear that markets are not healthy, the impact on the economic cycle will be marginal.

The managers explained: “In a world of constant deflation, with near-zero or negative interest rates, there are, in any case, valid alternatives in terms of investments”. “Active management remains the ideal way to convert stock picking, especially during corrections, into the best possible performances. However, we must continue building portfolios with prudence: indeed, at a time when the correlation between stocks and bonds is positive, caution might not be enough,” they emphasized.  In short, it’s time for a new approach: we need to be flexible and dynamic in the face of heightened volatility.

The general outlook is not disastrous: there will be waves of corrections when we will need to take advantage of the right opportunities, but sooner or later, markets will take off again, without a downwards cycle beginning.  “This is not the year to be superheroes”, summarized Kairos strategist Alessandro Fugnoli, explaining that “2016 will be a settling-in period to metabolize the last six years of rallies, and there will be a number of traps that we’ll need to recognize in time”.

Ergo: patience, prudence and defense.