Despite a turbulent start to the year, Swedish investors have adopted an optimistic outlook for the rest of the year, emphasising the need to maintain a long-term perspective and balance in savings. 

Swedish pension company, Skania, said that it has been seeing signs of improvement for both the stock market and the economy, with head of allocation, Maria Qundos, warning that although it is "easy to get carried away by short-term stock market fluctuations, for savers it is about sticking to a long-term plan".

"A balanced portfolio with several building blocks is the key to both weathering the turmoil and taking part in the recovery going forward," she stated.

Indeed, Skandia's investment outlook showed that the stock market has recovered strongly since the spring, driven primarily by American technology companies. 

However, Skandia acknowledged that the road ahead is marked by continued uncertainty, as at the same time, risks linked to trade policy, inflation and geopolitics remain. 

"Fiscal stimulus and continued interest rate cuts provide growth support but also create risks," the report stated.

"The picture ahead is divided and the road ahead is fraught with uncertainty, but compared to earlier this year, there are now slightly more glimmers of hope."

Given this, the firm stressed the need for Swedish savers to build a well-diversified portfolio and think long-term. 

"The global economy faces major challenges, but also new opportunities," Skandia macroeconomist, Seyran Naib Fransson, said. 

"We see that fiscal policy initiatives and lower interest rates can provide a much-needed boost, but the road ahead remains fraught with uncertainty, not least for Sweden where household caution remains." 

The impact of diversification has already been seen in practice, as KPA's interim report revealed that, despite the "great uncertainties" in the world, its long-term strategy of spreading risk across several asset classes has created a relatively stable return during the first half of the year. 

"We have continued to invest in infrastructure and climate adaptation in line with our plan, and the strategy for property acquisitions remains," Folksam Group head of asset management, Marcus Blomberg, said.

"This, together with our strong financial position, contributes to good conditions for creating a good long-term return for customers." 

Swedish pension provider SPP also suggested that the outlook for the rest of the year could be stronger, noting that tariff tensions have eased further following recent trade deals and a delay in tariff hikes between the US and China.

However, the group also acknowledged the continued uncertainty, pointing out that while growth expectations have been revised upwards further, they are still lower than at the beginning of the year.

In addition to this, it noted that the US labor market has weakened further, and revisions show that employment growth was weaker than previously expected.

Skandia made a similiar analysis, suggesting that "all in all, it points to a gradual slowdown".

"Forecasts for the coming years point to subdued growth, although the situation is not quite as bleak as it seemed last spring," the group's investment outlook stated.

But there could be a renewed focus on European holdings, as Skandia noted that although growth in the euro area remains weak, as US tariff policy remains a clear headwind for European exports, there are "bright spots", with the German government's stimulus package making investors turn their attention to Europe again, in the hope of brighter developments ahead.

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