4 for '24: Year Ahead Outlook

2023 will likely go down in history as a year of extreme speculation. However, we believe there are once-in-a-generation investment opportunities for 2024 resulting from that overly speculative myopia. If 2023 was the year of speculation, 2024 might be the year of a return to fundamentals.

Equity market performance was dominated by seven stocks (now widely termed the “Magnificent 7”) despite that those stocks’ fundamentals and growth prospects are not at all unique. Individual investors shunned diversified portfolios to trade individual stocks and their risk appetite hit a roughly 20-year high.

Cryptocurrency returns were jaw-dropping during 2023 despite that cryptos have no economic purpose other than to provide a means of speculation or to enable money laundering and illegal money flows. Currencies’ primary role historically has been to facilitate consumption and trade, and it was not until later that they were traded as financial instruments. If cryptos are indeed currencies as some claim, they would be the first currencies in history established without legal economic purpose.

2023’s speculation could make 2024 the beginning of a once-in-a-generation opportunity for investors willing to embrace diversification. The idea that there are only seven growth opportunities throughout the entire global equity market is categorically wrong, and our portfolios are fully embracing the broad range of attractive investments investors appear to be ignoring.