Four Horsemen

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Markets over the last couple of years almost seem to have been exposed the Four Horsemen of the Apocalypse (conquest, war, famine, and death). Inflation followed on behind the horsemen and we are pleased to see that it is finally falling, to be followed by interest rates at a later stage; in the absence of the horsemen riding out again we are now reasonably confident as regards recovery over 2024 and into 2025.

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However…. In March of 2020 we were facing a global plague which had the potential to kill us, creating fear and uncertainty; the relevant bit here is the ‘Black Swan’ bit at the bottom: https://www.sjohnsonwm.co.uk/coronavirus

 

This is how we believe investment markets will fare over the medium term:

 

• Inflation reducing followed by falling interest rates will boost markets over 2024 and into 2025. Falling interest rates encourage both people borrowing at one end of the scale (boosting economies through expenditure) and investment at the other end (due to people earning less on their deposits).

 

• Changing markets –  things move on and we feel the likely themes to watch are: Sustainability – see our commentary on this here. We retain exposure to technology in all of its guises – like it or not we all rely on this from Amazon, to mobiles to Facebook.  In addition Healthcare will continue to be important. Finally natural resources are finite –  and worth retaining in portfolios.

 

Summary: History is our only guide to the future and history has continued to demonstrate the resilience and adaptability of the human race. Markets have absorbed quite a bit of bad news and the press have exacerbated the effect of this. We are more sanguine now about the next 12 months and particularly over the medium term (5 years) and beyond.

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As always, call if you want a chat.

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Steve & Martyn

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February 2024

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