In our 2024 outlook, bonds emerge as a standout asset class, offering strong prospects, resilience, diversification, and attractive valuations compared with equities.

With interest rates higher amid a challenging macro environment, we see a compelling case for bond allocations and are cautious about higher-risk investments.

We assess risks and potential opportunities for multi-asset portfolios amid late-cycle dynamics, higher inflation, rising interest rates, and geopolitical uncertainty.

Asset allocation decisions can be challenging for investors during the later stage of the business cycle. Focusing on quality is likely the best way to manage the transition from late expansion to a potential recession.

In PIMCO’s recent Cyclical Outlook, our colleagues Joachim Fels and Andrew Balls outlined a “growing but slowing” backdrop, with the global economy in the final stages of an economic cycle. This late-cycle phase poses significant challenges to asset allocators.