Nobody’s a crystal ball (and that’s OK)
6 mins to read this article
Daniele Antonucci
Daniele Antonucci is a managing director, co-head of investment and chief investment officer at Quintet Private Bank. Based in Luxembourg, he jointly chairs the investment committee, owning decision-making and performance outcomes. As head of research, Daniele oversees the investment strategy feeding into portfolios and the teams of specialists across asset classes and solutions, ranging from macro, fixed income and equities to funds, alternatives, and structured products and derivatives. He leads the network of chief strategists, communicating the house view on the economy and markets to financial advisors, clients and the media.
Prior to joining Quintet in 2020 as chief economist and macro strategist, Daniele served as chief euro area economist at Morgan Stanley in London. He completed the High Performance Leadership Programme at Saïd Business School, University of Oxford, holds a master’s degree in economics from Duke University and graduated from the Sapienza University of Rome. Featured in The Economist and Financial Times and often quoted in the generalist press, he’s a published author in finance and economics journals and investment magazines, a frequent speaker on CNBC and Bloomberg TV, and an ECB Shadow Council member.
The House View on investing with conviction
Investing is about the future. It’s uncertain, constantly evolving and impossible to predict with precision. That’s why conviction doesn’t mean clinging to forecasts – it means building a clear, adaptable view based on logic, not emotion. Investment outlooks offer a base case, but we’re not bound to them. As economies shift and markets move, we refine our thinking and adjust our views. This is conviction: a disciplined process that adapts to change instead of resisting it.
A key pillar of our investment philosophy is investing with conviction. There’s no rigid formula that really works; it’s about finding balance. We tilt portfolios towards our base case while keeping alternative scenarios in mind. That’s how we diversify across asset classes and geographies – seizing opportunities wherever we can find them and mitigating risks wherever they come from. We trade tactically when it makes sense, but we avoid unnecessary back-and-forth. Conviction means knowing when to act and when to hold back.
What trading can and can’t do
One approach to investing is simply reacting to market moves. This might feel intuitive, but acting after the fact – selling when markets have already fallen or buying after they’ve already risen – often comes too late. To time your trades perfectly, you’d have to predict market moves well before they happen, not react to them. And predicting markets with consistent accuracy is near impossible.
Trading has its place. It helps us respond to new information and position for short-term trends. We trade to rebalance portfolios when asset weights drift from targets, and we act when market flows, momentum and positioning align with our views. But trading alone doesn’t drive performance – especially after costs.
Once markets move, the opportunity often passes. At that point, the choice is to stay invested to compound returns over longer horizons or immediately lock in gains (or losses). Consistently predicting future events, such as corporate earnings surprises, interest rate cuts or hikes, or overall market moves, is extremely difficult. That’s why we focus on what we can control.
Preparing for different outcomes, not predicting them
If successful trading, for most investors, is very difficult, what can investors do? Build globally diversified portfolios aligned with their return and risk goals. They can adjust positioning with conviction, within clear boundaries. And they can follow a disciplined process that removes emotion from decision-making. That means avoiding excessive risk when markets are euphoric and staying invested when prices become attractive, but sentiment is low.
If forecasting every market move is unrealistic, how do we invest with conviction? The key is preparing for a range of outcomes. A globally diversified portfolio spreads risk across regions and asset classes. It evolves with opportunities and challenges across both short- and long-term horizons. For example, if trade tensions rise and equities fall, our short-dated government bonds may help offset losses. This approach removes emotion and compounds returns over time.
Conviction is not about certainty. It is about clarity, discipline and preparation. We use economic forecasts to inform our decisions and as a communication tool. But we don’t try to predict every market move. Instead, we build portfolios that are resilient, diversified and responsive to change. That is how we help our clients stay invested with confidence – through cycles, surprises and opportunities.
Our investment convictions today
We currently favour equities over bonds, though our conviction is moderate given ongoing risks, ranging from geopolitical and trade uncertainty to inflation stickiness. This tactical tilt reflects our view that equities offer more attractive return potential in the current environment, while bonds continue to play a key role in portfolio diversification. Our equity exposure is spread across geographies, sectors, currencies and investment styles – with overweight positions in the US, Europe, Japan and emerging markets. Importantly, we adjust portfolios when conditions call for it, not according to a fixed schedule or publication cycle.
Take gold: its price has risen by about 50% year-to-date, as investors sought protection from geopolitical uncertainty and sticky inflation. We’re happy to continue holding gold strategically as a key diversifier. However, the price has now reached our near-term forecast, and we think the outlook for further gains is limited. Recent buying appears more speculative than fundamental, with less support from emerging market central banks. So, we’ve reduced our overweight in gold back to neutral.
We’ve used the proceeds to buy UK gilts, ‘hedged’ into euros to strip out the effect of currency swings. These gilts offer a yield advantage for euro-denominated investors relative to German Bunds and other European government bond markets, which we’ve also reduced slightly to finance the gilt purchase.
We’re also adjusting our Japanese government bond allocation. Our original position aimed to benefit from the yen appreciation we were expecting. But following the Japanese election outcome, signs point to more fiscal stimulus and potentially fewer interest rate hikes. While we still like Japanese government bonds for the diversification they provide, we no longer hold conviction in our yen position. We’ve therefore swapped our yen-denominated Japanese government bonds for a euro-hedged version, which also offers a yield advantage over our previous position, and relative to US Treasuries and German Bunds.
We take time to listen
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