The basics:

• J.P. Morgan stresses portfolio resilience amid uncertainty
• AI innovation seen as key growth driver in 2025 markets
• Dollar volatility, currency diversification remain crucial
• Private equity secondary markets offer new deal opportunities

J.P. Morgan Private Bank is out with its 2025 Mid-Year Global Investment Outlook. Given the economic anxiety and uncertainty, the assessment is aptly titled: “Comfortably Uncomfortable.”

“Portfolio resilience emerged as a key theme in our 2025 Outlook, underscoring its heightened relevance as investors navigate a new reality,” said Grace Peters, co-head of global investment strategy at J.P. Morgan Private Bank. “Investors must contend with deep policy uncertainty, still elevated valuations and concentration in U.S. equity markets, and persistent volatility as they anticipate whether the U.S. administration’s more market-friendly proposals will come to fruition in the latter half of 2025.”

The annual outlook focused on four central themes:

Portfolio Resilience & Global Diversification: Anchoring Stability in Shifting Markets

With investors confronted with dual risks related to growth and inflation, alongside enduring policy uncertainty and geopolitical changes

“Diversified hedge fund strategies are expected to deliver returns and volatility that are slightly higher than core fixed income, with very low correlation,” said Nur Cristiani, Latin America head of investment strategy. “Equity-linked structured notes can provide investors with an additional lever to generate income uncorrelated to fixed income, with twice as many clients utilizing these notes this year compared to 2024.”

Currency Conundrum: The Dollar’s Journey in a Post-Exceptionalism Era

With the dollar facing pressure from rising protectionism and potential deficit-increasing fiscal policies

“For U.S. investors, diversifying currency exposure through equities denominated in Euro or Yen can help mitigate potential losses associated with dollar depreciation,” said Jacob Manoukian, U.S. head of investment strategy. “We are focused on the Euro, Japanese Yen, and gold due to their size, liquidity, and historical role as alternative reserve assets.”

Artificial Intelligence: Underestimated Potential in a Distracted Market

Despite tariff-related distractions, the transformative advance of AI persists

“We are increasingly confident that AI is likely to drive significant productivity gains, particularly sectors poised to benefit such as software and financials,” said Alex Wolf, Asia head of investment strategy. “As the AI race hits a pivotal moment, research labs are driven to secure funding and innovate self-improving models, while heightened competition is set to lower prices, foster differentiation, and accelerate adoption.”

Alternative Dealmaking: Secondary Markets and Evergreens Take Center Stage

Private equity ecosystem is finding better balance; secondary markets present significant opportunities, as the elevated probability of prolonged uncertainty creates a cloudier outlook in the near-term on the pace of dealmaking

“This slower pace coupled with aging assets in existing private equity portfolios could create a compelling opportunity for secondary managers,” said Sitara Sundar, head of alternative investment strategy.

The 2025 Mid-Year Global Investment Outlook is available here.

“Given the balance of risks, and the possibility of a downtrend for the U.S. dollar, a resilient and globally diversified portfolio can help give investors the confidence to stay anchored to their long-term plan,” said Stephen Parker, co-head of global investment strategy. “With the likelihood of continued market volatility, it’s time to get comfortable being uncomfortable.”