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2025 MIDYEAR INVESTMENT OUTLOOK

Getting a grip on uncertainty

July 1, 2025 | Sharp U.S. policy shifts and elevated uncertainty reflect an evolution of the new macro regime. What matters: getting a grip on uncertainty by identifying its core features. Long-term macro anchors are weaker given the many different potential outcomes. Yet immutable economic laws prevent policy from revamping the world overnight.
Read our 2025 midyear outlook (PDF) Read our 2025 midyear outlook (PDF)

Investment themes

  • 01

    Investing in the here and now

    Immutable economic laws limit how fast global trade and capital markets can evolve, providing more certainty about the near-term macro outlook than the long term. That keeps us pro risk and overweight U.S. equities.

  • 02

    Taking risk with no macro anchor

    We believe this environment of transformation is better than the prior decade for achieving above-benchmark returns, or alpha. Yet the volatile macro environment injects risk into portfolios that needs to be actively managed or neutralized.

  • 03

    Finding anchors in mega forces

    Even with the loss of long-term macro anchors, we believe mega forces are durable return drivers. Yet mega forces don’t map into broad return drivers, and we get granular to track their evolution across and within asset classes. We like the AI theme.

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BlackRock Bottom Line: BlackRock Investment Institute 2025 Global Outlook

Speaker: Wei Li, Global Chief Investment Strategist, BlackRock

Mega forces, like the rise of artificial intelligence (AI) and geopolitical fragmentation, are transforming economies. That means investors can no longer view the world in terms of business cycles or temporary deviations around stable long-term trends. Understanding the forces reshaping global economies can help investors identify unique opportunities. 

Our three investment themes as we head into 2025 are: financing the future, rethinking investing and staying pro-risk.

BlackRock Investment Institute 2025 Global Outlook

Our first theme is financing the future. Sizable capital will be needed as the rise of AI, the low-carbon transition and other mega forces drive a broad infrastructure buildout. With governments constrained by high public debt, capital markets will play a pivotal role in providing the funding needed. Private markets can offer exposure to broader sources of credit as well as to early-stage growth companies driving AI adoption.

Our second theme is rethinking investing. An ever-changing outlook calls for an ever-evolving portfolio. It calls into question many long-held investing principles, including the idea of a neutral “benchmark” portfolio like the traditional 60/40 portfolio mix of stocks and bonds. As mega forces reshape whole economies, we think investors should focus more on themes and less on broad asset classes. And with a wide range of possible outcomes, investors may wish to reassess portfolios more often.

Our third theme is staying pro-risk. We see the U.S. still standing out versus other developed markets thanks to stronger economic growth and its ability to capitalize on mega forces. We recognize some U.S. equity valuations look expensive but don’t think historical averages are necessarily a good guide amid a transformation.

The bottom line is: Moving into 2025, we think investors could benefit from viewing the world through the lens of transformation. We think being more dynamic with portfolios and getting granular with views will both be essential.

BlackRock Bottom Line

Entering the new year, the BlackRock Investment Institute outlines areas of opportunity as economies are undergoing a transformation. Wei Li, BlackRock’s Global Chief Investment Strategist, shares the three themes of the 2025 Global Outlook.

Global Investment Outlook

Take a deep dive into our latest views on the Global Outlook

Dec 4, 2024
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BlackRock Investment Institute

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