Investors face the challenges of higher rates, slower growth and geopolitical tensions next year, according to Geneva-headquartered Lombard Odier.
Next year, peaking yields and slowing growth are expected to be positive for high quality fixed income as well as equity risk appetite, according to a Lombard Odier note, though market volatility is expected to continue in the first half. And on the macroeconomic environment, the bank notes that «historical evidence argues against ruling out a recession» though it is still positive.
«In 2024, investors must balance the lingering effects of high interest rates leading to slower growth, against welcome disinflation, and the risks around geopolitical tensions,» said the note authored by chief investment officer Michael Strobaek and head of asset allocation Christian Abuide.
Top Calls
In turn, Lombard Odier unveiled its top 10 investment convictions for 2024:
- Maintain a neutral overall risk stance in portfolios
- Cash and long-dated bonds offer yield and diversification
- Prefer investment grade credit in developed markets
- In riskier bonds, prefer high yield and emerging local debt over hard currency bonds
- Equities can offer upside; take advantage of corrections
- Prefer US over China and Europe regionally, and quality stocks generally
- The US dollar is likely to see a recovery heading into 2024
- Commodities present opportunities in a broad portfolio context
- Alternative strategies for income and diversification
- Private assets to strengthen long-term portfolios
