Where to Invest in 2024

As we stand at the threshold of a new year, the financial landscape is as usual overflowing with speculation regarding the prospects of investment markets for 2024.

Looking back, 2022 was a year of negative returns across the board, as we witnessed a meaningful loss in value for investors whether they were aggressive, conservative or balanced.

And then in 2023, we observed a decent rebound in investment markets, driven almost entirely by Tech behemoths such as Microsoft, Google, Amazon, and Meta. Towards the year end, a notable ripple effect was witnessed, as smaller, overlooked companies began to capture the attention of investors.

Gazing into the horizon of 2024, there are reasons to be optimistic , particularly for non-Mega Cap entities that are presently undervalued and gaining traction. The key will be to see if expected interest rate drops will materialise, and this would be good for both shares and the more defensive fixed interest investments.

Nevertheless, the reliability of majority opinions in predicting market outcomes has been historically inconsistent. In 2022, optimism prevailed at the start of the year, following the strength of 2021, only to be met with disappointment in actual performance as the year played out. Similarly, at the commencement of 2023, there was significant pessimism from market commentators after the challenges of 2022. Amajority view that once again proved to be off the mark.

This highlights the perennial human tendency to extrapolate recent trends into future expectations. History shows the short term is unpredictable, while in the longer run we can more reliably expect excellent results.

Rather than aspiring to make this a remarkable investment year, our focus should be on intelligently capturing market returns or modestly outperforming them using funds with a long term track record of outperformance. As billionaire investor Seth Klarman has written “The single biggest edge for an investor is long term orientation”

If we go to a casino, we can be sure that the longer we stay the more likely we are to lose. Conversely, in the world of investing, time is our ally. The longer we remain invested, the greater the likelihood of success, and we should hold this in mind over and above a year by year view where predictions are rather hit and miss.