Understanding our period in history is key to knowing where to allocate assets

Our economic conditions are key to understanding how to position ourselves in the lights of economic headwinds – some of which can be very challenging.

Western European countries are currently beset by a mixture of exogamous and internal threats. High debt to GDP ratios, ageing populations and weak industrial manufacturing are among the problems.

How to deal with them remains politically and economically toxic. While some have argued in favour of swinging cuts, the issues relating to maintaining a functioning civilisation and limiting the tax burden on working professionals are among the difficult challenges to reconcile.

Where to position our assets remains a key question – investors should in our opinion take a balanced approach – focusing both on opportunities in emerging markets and the stars that continue to emerge from western Europe and of course the USA.

To manage these structural deficits and difficulties in maintaining a growing or at least stable standard of living it is likely that Western nations will increasingly operate onerous tax grabs, as well as present politically challenging options to the electorate, who are unlikely to favour any such grabs.

The need to balance the books could create situations such as desperate attempts to raise funds through bond issuance programmes or making difficult decisions in regards to public spending, taxation and capital investment.

Investors with a long-term timeframe should overlook short-term fluctuations in the markets and political claims and instead look at cash-rich, dividend-paying and well-run businesses.

This could involve using a global focus and avoiding too many investments in potentially problematic jurisdictions on ones that are not growth focused.

Key regions for investigation in 2025 to help balance your investment portfolio include SE Asia, India and Ethiopia/Kenya/Rwanda. These fast-growing regions show high levels of growth and when balanced with good governance hold great opportunities for stockpickers with a global focus.