Where to invest in 2024: stocks, fixed income, real estate, gold and cryptocurrencies

“Inflation, growth and central banks are the three factors that will direct the markets in 2024,” says Sebastián Velasco, director of American asset manager Fidelity in Spain. A cocktail that is not new for investors and has been repeated since the beginning of 2022, when the world began to wake up from Covid. Europe will remain in economic anemia, as shown by the forecasts of the European Central Bank (0.8%) and the International Monetary Fund (1.2%). The USA cannot ring its bells either: the IMF predicts that GDP will increase by 1.5%. Moderating inflation would allow central banks to pause rate hikes and even cut interest rates, as the Fed has promised three times in 2024. The million dollar question is: When will the ECB cut interest rates? Optimism is returning to the stock markets.

Technology and artificial intelligence, the best option

“Main global equity indices, e.g. MSCI World and S&P 500 could reach all-time highs throughout the next year. “We see a buying opportunity in any correction,” says XTB analyst Joaquín Robles.

The consensus of experts is that the rise of technology companies and artificial intelligence (AI)-related companies will continue. In these sectors, Wall Street leads with the famous magnificent seven; Microsoft, Alphabet, Amazon, Apple, Meta, Nvidia and Tesla– Although there are giants outside the New York Stock Exchange such as Asian companies Samsung, Tencent and Alibaba to consider; European SAP, Accenture, ASML and Dutch Nxp Semiconductors.

“This is how I distribute the portfolio: 50% in S&P 500 values ​​with private holdings of major technology companies; “The other 25 percent is in EuroStoxx50 securities, especially banking and defense sector securities, and the remaining 25 percent is in securities in the Nikkei index, which is a little talked about but very well performing and followable index.” iBroker analyst Antonio Castelo adds.

The US Nasdaq 100 index has been the main protagonist of recent low rates, with an accumulated return of 358% over the past decade; This represents an average annual return of 35.8% over the last 10 years; this is much higher than its local index. and European competitors. Víctor Alvargonzález, founder of independent advisory firm Nextep Finance, argues that a stable or falling rates scenario is suitable for such actions “unless an unexpected event occurs.”

In any case, experts remember that what matters is diversity and professional advice. “The worst performing sectors in 2023 are as follows: Electricity companies and real estate companies may offer opportunities”states CMC Markets analyst Luis Francisco Ruiz.

Opportunity for the most conservative

Fixed income has shined in 2023 and is expected to continue to provide opportunities for the most conservative savers, who have been starved of assets to invest without having to undertake any investments since the beginning of the 2008 financial crisis, when interest rates began to be lowered. investment profile that is not suitable for everyone, such as risk and volatility.

“We like Spanish, German and American public debts to be denominated in dollars. Dídac Pérez, investment director of Caja de Ingenieros, summarizes: The lower investment grade part of corporate bonds also appeals to us. An example of this is three- and six-month Treasury bills, which offer a yield of 3.7. That is, a higher profitability than deposits, with almost no risk and above the current inflation rate of 3.2%. There is some more profitability in longer-term bonds “We can build a portfolio with a yield close to 4” Percentage in bonds issued by companies and governments with good credit quality. We are committed to an investment term of three to five years, as it seems particularly advantageous for us compared to longer maturities,” evaluates Castelo.

Another option is avoid time riskBecause of the future actions of central banks and their investments in exchange-traded funds (ETFs) that do not have a maturity date. “With prices at decade lows, there are plenty of bonds from very low-risk issuers offering more than 4% yields. We can take advantage of this through fixed-income ETFs,” Robles argues.

A suggestion repeated by financial advisors is that fixed income should provide certainty and little risk to the portfolio, while profitability should be sought in equities. “So-called junk bonds, These are not the best option due to the accumulation of maturities due to new refinancing.”Ruiz’s views are as follows:

Scarcity affects prices

Brick will face a sales slowdown in major cities through 2024 due to supply shortages and rising mortgage prices. This is an opportunity for small property owners who have sufficient liquidity to purchase an apartment or parking space in Spain’s main cities. Additionally, leases renewed next year could increase by up to 3% from the current 2%; This rate is very close to 3.2% of inflation.

“There are smaller opportunities, small real estate developments and small tertiary or residential buildings in the urban fabric. Alternative sectors -garages, warehouses…- “They also play an important role in achieving better returns,” emphasizes Ignacio Ortiz de Andrés, director of market research at Activum. For high net worth and investment capacity “on finalist land in the main cities and dynamic coasts such as the area around Malaga. At sector level there is opportunity in traditional housing, elderly residences, student residences, rental buildings…”

“Cross-opportunities will emerge across all sectors in 2024: higher quality and, above all, green ones will attract the greatest investment appetite. Some of the great trends we have experienced: Aging of the population, greater mobility or digitalizationIt accelerates changes in some sectors. The volume allocated to operating segments such as hospitals, nursing homes and training centers will also increase significantly,” explains Paloma Relinque, director of capital markets at CBRE Spain.

For all savers who want to have bricks and liquidity at the same time, Possibility to invest in funds, listed promoters or Socimis It does not require such a high investment. “It is interesting and useful for both small and large investors,” says Ortiz.

Diversify to take and hedge risks

Cryptocurrencies revived in 2023. Its main benchmark, Bitcoin, has erased losses in 2022 and is heading towards $50,000 thanks to the possible launch of exchange-traded funds in the cryptocurrency and less restrictive monetary policy. The ups and downs of this market culminated in Bitcoin becoming the most profitable asset of the year, up 160%. But profitability cannot keep up with the volatility that this and other crypto assets have. Despite their increase, those who entered Bitcoin on January 1, 2022 still have hidden losses of 7%.

“It has become clear in recent years that they are not a safe-haven asset, as they have fallen by an average of 80% in the face of the highest inflation in the last 40 years. The collapse and scandals of many of the major intermediaries. Robles said: “This continues to be a source of distrust. Additionally, there continues to be a lack of clear regulation and it is not considered a widely accepted means of payment,” he explains.

Related news

Analyst consensus is slightly more positive on gold and silverwith. The first closed the year with a 13 percent increase, thanks to flows from stocks and bonds in the worst moments of 2022 and the large investments pursued by many central banks around the world. Silver gained only 1.5%. “Gold has suffered from the improvement in real interest rates (nominal rate minus inflation), and now with rates falling in the bond market, these real interest rates are worsening and the attractiveness of gold is increasing,” Alvargonzález notes.

“These two metals should be included in a diversified portfolio” Considering the degree of correlation with stocks or stock market indices. It has industrial uses, gold is used in electronics, medical and dental applications, silver is in great demand in the electronics sector and is used more in photovoltaic cells,” argues Castelo.

2023 is an unusual year

The year that ends will go down in history as an exercise in the gains in stock markets and the return of profitability to bonds since the financial crisis that began in 2008. Diversified investors also benefited from gains in gold (13%) and Bitcoin’s resurgence after the disastrous 2022 (-65%) The bankruptcy of Terra and FTX left its mark. All this ended despite many geopolitical turmoil such as the war in Ukraine and Palestine, negative forecasts for a year of general recession in all Western countries, the collapse of banks in the USA and the fall from grace of Credit Suisse. It is owned by HSBC.

Return of normality in the cost of money earned In February, queues formed in front of the Bank of Spain in the evening to buy treasury bills. and this anger has made ordinary citizens now the largest holders of short-term State debt, with close to 30% of the balance in circulation. The investment of Spanish families in this financial product is already doubling the investment in Ibex 35 shares. Managers hope that 2024 will continue to offer fixed income opportunities, despite the possible decline in interest rates.

The Spanish selector experienced its highest year since 2013, with a revaluation of 22.8 percent, after years of decline in banks. “Since 2008, companies listed on the stock exchange have diluted their shareholders with secret capital increases, the debt they carried was large… share repurchase plans and depreciation of treasury stockThanks to this, you pay shareholders through fewer shares in circulation, emphasizes José Lizán, director of Quadriga Asset Managers.

The most notable event in the markets outside Spain was Wall Street’s technology giants. The spectacular seven companies (Microsoft, Alphabet, Amazon, Apple, Meta, Nvidia, and Tesla) are up more than 95% this year, while the remaining 493 companies in the S&P 500 are up just 12%. Nasdaq settled at 41.5%. Some figures coming after an unforgettable 2022 for the technology sector Because of the interest rate increase. But this year they have benefited from the emergence of artificial intelligence and less pressure from the Federal Reserve. The big winners of recent years have once again clearly established themselves.

Source: Informacion


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