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The big picture

At Maj Invest our work with investments is based on the simple fact that economies all over the world have moved in so-called business cycles since market economy developed in England around the year 1800.

So the basis for our investments is the question: ”What can we learn from economic history the last 200 years?" There are a number of economic theories trying to describe this; however, unfortunately macro economists often disagree. But a number of economic relationships can be observed again and again over long periods of time throughout the world. These are called economic fundamentals, and they form the basis for our economic assessments.

Thus, economic fundamentals are good indicators of long-term investments over 10, 20 or 30 years.

When it comes to short-term investments and short-term trends, e.g. 3-5 years, economic fundamentals cannot stand alone. No one knows for sure how the economic development will evolve. This is why we have chosen to incorporate some variation in the form of scenarios in our assessments.

It is extremely difficult to predict a short-term trend of 1 year or less. Most financial variables are driven by capital flows on the short term, which in a global economy can dominate everything else. Therefore the development is characterised by investor sentiment, market players, investors' transactions and intervention by the central banks. In our opinion, the sum of all this is very unpredictable, and whether you are right will be relatively coincidental.

Maj Invest's working method

Today we are flooded by financial news, data, research and macroeconomic assessments. The most important part of our work is sorting, analysing and processing this information. We have spent many years identifying which sources we can use - and we still do. From this we form our own opinion of the central economic and financial variables. We call the overall description of the macroeconomic development and the financial trends, including fundamentals, the big picture.

To understand and take a position on the big picture is a really good start when you invest. This is why we use the big picture when deciding on the proportionate allocation of equities and bonds in portfolios with both types of assets, which generally determines the risk and return profile of the portfolio. In the same way the big picture affects the underlying selection of portfolio investments in many situations, e.g. in the form of the portfolio's cyclicality.

Learn more about the big picture

If you are interested in learning more about Maj Invest's most recent views on the big picture, please contact Head of Investor Relations Carsten Høegh on +45 33 38 72 24 or