2024 has seen a very different start to the previous year, with expectations for interest rates and inflation to fall rather than rise.
The expected returns on cash and fixed interest (Corporate Bonds/Government Bonds) are therefore higher than last year, however equity expectations have marginally fallen.
Stable interest rates and inflation could provide a platform for reasonable equity growth.
With interest rates higher in the UK than other developed countries, UK bonds have become more attractive than overseas bonds and this has the impact of reducing currency risk within portfolios too.
US equities saw phenomenal returns during 2023 (and before that), notably from the seven large technology stocks.
This could be an opportunity to take profits and move allocations to equities that have lower valuation points, for example Europe and Japan which also offer exposure to very different types of industry and companies.
Markets are dynamic and therefore proactive portfolio management can be advantageous. It presents an opportunity to react quickly and implement changes which either help manage risk or look to improve returns.
Although tactical changes are important, we believe that an overall diverse strategy is essential to help manage volatility and focus on long term returns.
Please get in touch if you would like to discuss your investments in more detail.
The value of investments can fall as well as rise. You may not get back what you invest.
The information contained within this article is for guidance only and does not constitute advice, which should be sought before taking any action or inaction.
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