Now is a good time for investors to balance, manage liquidity and build a strategy to achieve their financial goals, says the investor letter signed by Mark Haefele, Chief Investment Officer of Global Wealth Management who provides 10 resolutions to boost portfolios.
A remarkable year is drawing to a close. A record-breaking pace of interest rate hikes helped push bond yields to 16-year highs. The US economy confounded expectations for a recession and grew at a 5% annualized pace in the third quarter. Transformative innovations in generative AI powered a stock market rally. Wars impacting two energy-producing regions also captured market attention.
The dawn of a new year is a time to reflect and to make plans for the year ahead. In this letter, we present 10 New Year’s resolutions aimed at helping your portfolio navigate what we are calling “a new world”:
- Spend more time with family and friends – best wishes for the year ahead
- Take up yoga – get in balance, and stay disciplined yet agile
- Go for quality over quantity – buy quality in both bonds and stocks
- Embrace change – pick leaders from disruption
- Prepare for a rainy day – hedge market risks
- Don’t put all your eggs in one basket – diversify with alternative credit
- Try to see things from both sides – trade the range in currencies and commodities
- Think about the long term – capture growth with private markets
- Build a plan – a strategy for achieving your goals is key
- Seize the moment – manage liquidity
We enter the new year with a preference for quality bonds, which we think still offer attractive yields and the potential for capital appreciation as growth decelerates. Lower bond yields in 2024 should also provide a supportive backdrop for equities.
In equities, we see particular opportunity in quality stocks across all sectors, including the US technology sector, which should be well placed to grow earnings despite a weaker economic environment.
Longer term, we expect disruptive trends in technology and other industries to create compelling investment opportunities in both public and private markets.
