Global markets recovered well towards the end of 2023. And with some central banks pausing interest rate hikes towards the end of last year, there are signs that they may have reached their peak.

So, what does 2024 hold for financial markets? And where should investors look for opportunities? Our Investment Outlook 2024 sums up the issues that affected the global economy in 2023 and looks ahead to where the best prospects of 2024 might lie. 

Our investments are managed by the experts at Coutts. 

See what they think about the year ahead and where potential opportunities could arise in our Investment Outlook 2024.

In this investment outlook, we take a look at:

Interest rates

For investors, last year was all about central banks battling to bring rising inflation back down by hiking interest rates. This created a challenging macroeconomic environment for investors at the start of 2023.

Company profits are hit by higher borrowing costs when interest rates rise, as well as people being encouraged to save rather than spend. And existing bonds become worth less as new bonds come with higher yields. So higher interest rates can be bad for both stock and bond markets.

Corporate earnings

Despite the US economy showing resilience in 2023, corporate earnings announcements (where companies release their quarterly performance figures) haven’t been as positive.

While companies have mostly managed to remain profitable, growth has been stagnant, which was to be expected against a backdrop of rising interest rates. 

Asset allocation

With everything mentioned so far taken into consideration, our funds are positioned to lean into the positives while also earning the bond yields that come in a higher interest rate environment.

Within bonds, we’re earning 4-6% yields from the global government and corporate bond markets at the time of writing. We’re also benefiting from higher sterling corporate bond yields, which we bought into opportunistically in 2023. 

Investments explained

Investing can sometimes appear complicated. Whether you're new to investing or an experience investor, we've got a range of articles to help you understand more about investing and the current investment landscape. 

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