Understanding last month's surprising market changes | December market analysis
Join Victor Cianni, FRM Alpian's Chief Investment Officer, as he navigates the twists and turns of the markets during December 2024 following the rhythm of one special song. To listen to the song of the month, you can follow our Spotify playlist.
Happy New Year! We wish you success in 2025, hoping the markets continue to offer opportunities as abundant as last year’s gains.??
Now, to our analysis: December was a month of unexpected shifts. Following a year marked by significant growth, a dramatic move by the Swiss National Bank, reducing interest rates by twice what was anticipated, reshaped the financial landscape.?
Interested to understand more? Here we go:?
The market at a glance: Changes?
As David Bowie sang in "Changes", "Turn and face the strange..." The close of 2024, filled with market surprises, invites us to embrace the uncertainties of 2025 with resilience and curiosity.?
December and early 2025 brought not only seasonal treats but also unexpected twists in equity, bond, and commodity markets. As we turn the page on 2024, Bowie’s words resonate: "Time may change me, but I can't trace time."??
With big changes and uncertainties ahead, 2025 also holds opportunities for those ready to face the challenges. It’s time to embrace the "Changes."?
Key takeaways??
Demystification room: True or False? Debunking 2 financial myths for 2025
As we step into 2025, it's crucial to challenge and overcome certain financial myths that might be holding you back. By addressing these misconceptions, we can pave the way for a more prosperous financial year.
Here are two pervasive myths that need debunking to help you optimize your financial strategy in 2025:
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Myth 1: Negative interest rates won’t be back anytime soon
Negative interest rates left a bitter memory. Between 2015 and 2022, savings accounts yielded nothing, and some even had to pay banks to hold their deposits. Inflation brought that era to an end, briefly allowing decent returns on deposits.
But this reprieve may be short-lived. In less than a year, the Swiss National Bank slashed rates from 1.75% to 0.5%, with banks following suit. Average savings rates, once 0.75% in early 2024, are now near zero. Could negative rates return?
“Nobody likes negative interest rates, not even the Swiss National Bank,” said SNB President Martin Schlegel. “But we’re ready to reintroduce them if necessary.”
One thing is clear: cash accounts won’t be the place to grow your wealth in 2025.
Myth 2: A good year for investment is always followed by a poor one
“What goes up must come down,” says the old adage. While 2024 was a strong year for investments, should we brace for the worst in 2025? Without a crystal ball, we can turn to history to test this idea.
Examining the performance of a balanced CHF investment strategy over the past 24 years shows that a good year is rarely followed by a bad one. More often, it leads to another good year, reflecting the market's natural upward trajectory.
That said, past performance is no guarantee of future results, and downturns are an inevitable part of the investment journey. However, over time, investing has consistently proven to be a rewarding strategy.
Alpian: Kick off 2025 with a financial check-up?
It's January, and like you, we're setting goals and tackling our New Year's resolutions. And let’s be honest, finances should be at the top of everyone’s list.?
Did you know you can video-chat with a certified Alpian wealth advisor right from your phone, at no cost? Why not start the year with a financial check-up? They’re ready to offer you clear, unbiased guidance to help grow your wealth.?
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