After stops in Milan and Rome, on June 9, the “Scenari e proposte di investimento” conference travelled to Turin, where it was held in a sophisticated lounge setting.
The event was hosted by Paolo Olivieri, Head of Kairos Advisory Services and the Turin offices, pleased to have brought the Kairos conference to the city he calls home.
Paolo Basilico, Chairman and CEO of Kairos, was the first to take the floor, briefly recounting the Group’s growth story and the critical factors in its success: independence, continuously supporting its clients and performance with a sharp focus on risk control.
Basilico reminded participants that Kairos was established as a partnership and it is precisely this business model, founded on recruiting top talent and fostering loyalty, that enables the firm to stand apart from its competitors in the wealth management industry.
After explaining the Group’s approach to portfolio management, aimed at delivering consistent results with low volatility, Basilico ended with these words: “We are currently facing a market dominated by central banks, which have, until now, implemented predictable policies and a favorable scenario for financial markets. But something is changing: the Fed could raise rates in the near future. We therefore expect more volatility, but our outlook remains positive, even for Italy, where the economy is improving.”
Alessandro Fugnoli, Kairos Strategist and author of the financial weekly “Il Rosso e il Nero”, spoke next, beginning his analysis of the history of the economy and markets with a nod to Basilico’s remarks.
“The economic cycle has historically lasted an average of seven years and, in the third year, interest rates usually rise, but that did not happen this time around. The 2008 crisis was violent: it scared policy makers, and to relaunch the economy, they decided to print money, but without genuine concern for inflation,” Fugnoli began.
He continued, “Now, in the US, the Fed will have to make up its mind: in all likelihood, it will raise rates a little, and inflation will reach 2%. In Europe, where the economic cycle is a few steps behind the US, quantitative easing is working: as we still have unused resources, we are in a position to maintain zero rates and this means that 2015 could be a good year for stock markets.”
“Despite the subjective malaise in many countries, major economies are showing full employment and, therefore, the turnaround has arrived: markets will metabolize volatility and might begin moving forward on a new basis,” Fugnoli added.
And, as he put it so succinctly in the last issue of “Il Rosso e il Nero,” we can expect “another modest drop in bond prices this year and in 2016, flat US equities in 2015 and European equities that will be capable of returning to their early April peak by the end of the year, but not going much farther than that.”