A time for proactivity
The headwinds of inflation are expected to moderate through 2024, with central bank and investor focus shifting towards growth and its sustainability.
Variable macroeconomic data will keep central bankers talking tough, but we believe we are past the peak in interest rates, with cuts expected in 2024 and into 2025.
Selectivity and dynamism will be key for investors in 2024.
Slower economic growth points to weaker earnings growth, suggesting a greater focus on quality within fixed interest and equities, as well as embracing duration to hedge against unforeseen risk off events.
We ‘hope for the best and prepare for the worst’, seeking to identify investment opportunities where the downside appears priced in. This aligns with our risk focussed investment philosophy and our endeavours to deliver good client outcomes in line with expectations.
As ever, it’s a challenging prospect, intensified by growing geopolitical hostilities, and over 40 countries (making up 41% of the global population), going to the polls in various elections through the year.
Selectivity and dynamism will be key for investors in 2024. The buy and hold strategy that worked so well post the Global Financial Crisis now looks questionable as the period of benign inflation and artificially low interest rates is unlikely to reappear. Equally, the safety of cash, sought by so many in 2023, looks unexciting as interest rates fall from their recent highs.
As a result, proactivity is necessary, as is a disciplined framework to ensure delivery in line with a client’s attitude to risk and capacity for loss to reflect the selected portfolio Risk Grade.
Humility, patience and perseverance are key to any successful investment strategy. Expect the unexpected, maintain diversification, and commit for the long term and the data shows that investors tend to do well.
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An investment’s past performance isn't an indicator of its future performance, and you could get back less than you put in. There's also no guarantee that an investment will meet its objectives.