Investment Trends for 2024

These are some investment trends you may wish to explore with Caravel Partners (Zambia) Ltd. in the New Year. We have options for every one of these.

1. Include Exchange-Traded Funds

There has been real movement of investors moving from mutual funds to exchange-traded funds. The majority has been into passive (index-oriented) ETFs. However, we think investors should consider active ETFs, which give consumers access to the best of all worlds (transparency and risk management, versus a too strong focus on an index like the S&P 500.)

2. Embrace Values and Unlisted Investments

Investors are increasingly looking for opportunities that align with their values, such as investments in clean energy and socially responsible companies. Advances in technology attract significant attention but should be accessed through expert fund managers. Democratization of private markets, with access to unlisted investments is growing rapidly, as investors seek both diversification and value.

3. Be Careful about Possible Recession

Investors should remeber that historically, around 6-12 months after periods of rapid interest rate rises, it is not uncommon to hit a recession. At the moment, it does look like we will see a soft landing, but people closer to or in retirement should look at risk reduction techniques rather than just increasing an allocation to bond funds since bonds tend to not do well in a rising interest rate environment.

4. Explore Alternatives

Understand the role that alternative assets play in a diversified portfolio and access to alternative asset investing. Bank of America data shows that 75% of investors don't think it is possible to get above-average returns by investing just in equities and bonds, with 80% of this age group opting for alternative investments.

5. Include Property in Your Portfolio

Savers approaching retirement in 2024 may want to explore alternative investments, with a particular focus on incorporating property into their retirement portfolio. These assets have the potential to offer a reliable source of income throughout one's retirement years regardless of the markets.

6. Focus On ESG Investments and Financial Literacy

In the upcoming year, consumers should focus on ESG investing and continuous financial education. Investors who prioritize ESG investing (Environmental, Social and Governance) align their portfolios with their values and contribute to positive social and environmental outcomes while still aiming for financial returns. Always consult with a financial advisor for personalized guidance.

7. Diversify According To Risk Tolerance

While there’s always something new and shiny to attract investors’ attention, the age-old wisdom of a diversified portfolio stands true, year in and year out. With bond yields now higher and cash earning decently, investors can diversify portfolios according to their risk tolerances, without having to be over-concentrated in the equity markets.

8. Invest In Precious Metals

There appears to be a huge shift in precious metals for the preservation of wealth. Holding physical precious metals is a wise strategy for longer-term preservation and short-term gains.

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