July Investment Report: Opportunities in a resilient economy
Welcome to July’s edition of the True Potential Investment Report, where we highlight the key themes and what they could mean for investors.
In this update, we review the global economic backdrop, explore the outlook for key regions, and outline where we continue to see opportunities across markets.
Key points:
- Global economic growth remains resilient.
- US innovation and investment continue to support markets.
- Europe is showing encouraging signs of recovery.
- Strong corporate earnings are underpinning equity markets.
- A balanced investment approach remains key in today’s environment.
Global economic backdrop
Equity markets are near record highs and the global economy continues to demonstrate encouraging resilience, in line with our expectations. Although higher oil and gas prices could place some upward pressure on inflation, particularly in energy-importing regions such as the UK, Europe and parts of Asia, conditions remain much more stable than during previous energy shocks. We continue to monitor developments closely while recognising the underlying strength of many major economies.
US outlook
The US economy remains in good health, supported by continued investment in artificial intelligence, improving productivity and government spending. While growth has been driven by a relatively small number of sectors, the benefits of innovation and investment are gradually spreading more widely across the economy. Corporate earnings have remained strong, providing a solid foundation for markets and helping to maintain investor confidence.
European outlook
Although Europe continues to face some economic challenges, there are signs that conditions are improving. Government support measures should help drive growth, while many European companies continue to benefit from attractive valuations and strong positions in global markets. A recovery in economic activity could also create a more supportive environment for corporate earnings over the medium term.
Equities and valuations
Global equity markets remain close to record highs, reflecting strong corporate earnings and a generally resilient economic environment. Importantly, profit growth has helped support valuations, meaning market gains have been driven by improving business performance rather than investor optimism alone. While expectations remain high in some areas, particularly in the US, earnings growth continues to be encouraging.
Our positioning
We remain neutral across major asset classes, reflecting our balanced outlook and our focus on capturing opportunities while managing risk. Within equities, we continue to see attractive opportunities outside the US, particularly in regions where valuations remain appealing and companies have the potential to deliver sustained earnings growth.
Within bonds, UK and US government bonds continue to offer attractive yields and compelling value, providing both income potential and diversification benefits. We believe current yields provide sufficient compensation for holding Investment Grade and High Yield Corporate bonds, supported by the underlying strength of the economy and the attractive income available.
Within alternatives, we continue to see value in a diversified range of strategies, helping to improve portfolio resilience and provide additional sources of return alongside traditional equity and bond investments.
With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest.
This material is not a personal recommendation or financial advice and the investments referred to may not be suitable for all investors.
Opinions, interpretations and conclusions represent the views of True Potential Investments at the date of publication and are subject to change. Forecasts are not a reliable indicator of future results.
All data sourced from Bloomberg L.P. (29/07/2026)
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