The coming year presents significant challenges for investors due to ongoing political and geopolitical changes. Risk management will be crucial to navigating market uncertainty. According to the analysis by Maximilian Tomei, CEO and Portfolio Manager at Galena Asset Management, in partnership with GAM, capitalizing on market dislocations through an active and diversified approach could prove beneficial.
One key factor will be the strength of the US dollar, which may significantly impact commodities. On the one hand, a strong dollar could dampen demand in emerging markets, affecting oil prices. On the other hand, this dynamic might create opportunities for repositioning ahead of the next economic cycle.
The performance of commodities will also depend on the broader macroeconomic environment. A global recession could weigh on the sector unless accompanied by high inflation. In this scenario, relative value opportunities may be more attractive than purely directional plays, making commodities a more compelling investment compared to other asset classes. In the event of a credit or liquidity crisis, the sector could outperform.
Adopting an active strategy that focuses on relative value opportunities will be essential for investors looking to optimize returns in what promises to be a challenging year.
What are your thoughts on the commodities market outlook for 2025? Share your opinion in the comment form below.
