Investors today are not short of information. Every week brings a fresh headline on oil prices, interest rates or AI valuations, and the temptation is either to react to each one or to tune out entirely.
Neither serves a long-term portfolio. What helps is a way to separate the signal from the noise, so let me share how I read the picture and what it means for the decisions in front of you.
Our research view is that global inflation will stay elevated for longer than markets currently price, with oil likely to hold above what the futures curve implies in the near term.
The experience of 2021 and 2022, when inflation proved far less transitory than most forecasters expected, has made central banks quicker to act and slower to ease.
We expect advanced-economy rates to stay restrictive, with the US Federal Reserve more likely to tighten further than to cut. That argues against building a portfolio on an assumption that rates will fall soon.
Investors should be careful with long-duration bets that depend on it, and keep a healthy allocation to instruments that earn a real return today.
Global equities add a second note of caution. US growth has stayed resilient, supported by heavy investment in AI infrastructure and relative energy self-sufficiency.
That is good for earnings, but it means much of the market’s performance now rests on a narrow theme.
We do not expect a repeat of the dot-com collapse, yet valuations in parts of the market look stretched, and the pace at which US Treasury yields rise matters as much as the level they reach.
Sharp moves tend to unsettle markets and raise dollar borrowing costs for emerging economies.
The answer is not to retreat from global markets but to diversify across sectors, geographies and asset classes.
The more encouraging story is closer to home. Frontier and sub-Saharan African markets have attracted strong foreign portfolio inflows over the past year, even as global volatility rose, the opposite of what history would suggest.
Stronger starting points explain part of this. Kenya’s foreign exchange reserves stand just under $15 billion, roughly double their level two years ago, and foreign direct investment rose above $3 billion in 2025, according to UNCTAD.
Inflation and interest rates are lower, private sector credit growth has recovered from its 2024 lows, and construction, electricity generation and vehicle assembly point to real momentum.
Kenya is not immune. Higher oil and fertiliser costs, and swings in global dollar conditions, still feed through to inflation and the shilling.
Our baseline is that headline inflation could drift higher towards the end of the year if temporary fuel relief measures lapse. But the economy is better placed to absorb such shocks than in earlier episodes, and that matters for how you position.
Four practical lessons follow. First, the shilling’s stability has been valuable, but it should not breed complacency. If you have dollar needs such as school fees, travel or offshore investments, plan ahead and spread conversions over time rather than reacting to short-term moves.
Second, local fixed income still offers attractive yields relative to inflation, so match maturities to your goals instead of chasing the longest tenors.
Third, Kenya’s low domestic savings are a long-term challenge, but they also open the door for investors with a long horizon to consider infrastructure-linked and other long-dated assets, where these suit their risk profile.
Finally, in an uncertain environment, holding some liquidity lets you act on opportunities rather than being forced to sell.
We are in a world of higher inflation, firmer rates and uneven global growth, but Kenya enters it with stronger buffers than before.
Investors who do best in these conditions tend to be those who stay diversified, match their investments to their time horizon and resist reacting to headlines.