This week we spoke to Andrew Hunt to get an update on his outlook for not only  a tricky month ahead but also on the rest of the year up until the US election and then beyond.

Over the next few weeks, Andrew sees potential for a liquidity-driven softness in markets, particularly during April. At the moment central banks have limited ability to add liquidity given recent inflation data. At the same time, new bond issuance is sucking liquidity out of the system. While not likely to be a crash, this could lead to a period of weakness, though not necessarily enough to warrant trading for most investors.

Looking out over the rest of 2024, the expectation is for a "muddle through" environment leading up to the U.S. election. The U.S. Treasury has tools it can deploy in the second half of the year to engineer another wave of liquidity. Any such liquidity ripple could lead to another, potentially more persistent, inflation ripple by year-end. In this environment, advisers should stay close to benchmarks across asset classes.

Turning to 2025 and beyond, investors need to prepare for a very different regime than the past 20 years. Disappointing growth and intermittent inflation may characterise this period, with echoes of the 1970s. Successful investing will require finding the right countries and the right companies.

At a macro level, the prescription is to identify countries with hard currencies, sound economic management and productivity growth to withstand currency appreciation - likely some emerging markets and, potentially, Australia if it can boost productivity. For stocks, the focus should be on companies with pricing power and control over costs, regardless of their "growth" or "value" label.

Andrew believes that investors will need to work a bit harder in the future, analysing individual countries and stocks in more granular detail rather than just broad regions and themes. The gap between winners and losers is likely to widen. Outperformance will come from truly understanding companies and countries, not just riding index-level trends. However, trading should be restrained to avoid giving away returns as there will be huge temptation to over trade range bound markets.

In Europe, aggressive ECB rate cuts are likely to, but may not, solve deeper structural issues. An aging population and falling house prices point to a multi-year slump. In contrast, the U.S. is likely to follow a different path leading to increased currency volatility. Australia's fate hangs on the balance of real growth from China and liquidity from the U.S.

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