How Conflicts and the Pandemic Reshaped Investment Strategies

Between 2020 and 2023, the world grappled with a global pandemic and various conflicts, resulting in notable movements in major asset classes. The pandemic led to widespread lockdown, disrupting economic activity and precipitating a significant decline in major equity indices, which lost more than a third of their value within weeks. Extensive fiscal support fueled inflationary pressure, which has yet to reach central bank targets in major developed countries. In March 2022, the outbreak of the Russia-Ukraine war sent shockwaves across the markets, leading to food and energy shortages and pushing their prices upward. A global slowdown started as central banks across most of the world started increasing rates, signaling an end to the era of cheaply available money. However, by the end of 2023, asset classes had largely recovered from the impact of the pandemic and conflicts, and the markets were optimistic of future rate cuts.