Investors should look to bonds, the energy transition space and innovative companies to help drive returns
Mackenzie forecasts slowing global growth in 2024 as developed economies move past peak inflation, and major central banks approach the end of a two-year interest rate hike cycle. The report predicts that elevated geopolitical tensions will contribute to volatility and could put upward pressure on energy prices and constrain global trade, while fixed income markets and the energy transition themes will likely represent compelling investment opportunities.
"With consumers continuing to draw down their pandemic savings and government spending in decline, our outlook points to slowing growth in 2024," said
Mackenzie has identified three key themes that it believes will provide opportunity for investors in 2024:
Look to Bonds to Drive Yield
Bond yields are reaching highs not seen since the 2008 financial crisis and may lift the asset class to the forefront of asset allocation decisions in the year ahead. High-quality bonds with attractive yields may offer better opportunities for income-seeking investors and provide balance to portfolios through enhanced diversification.
"We're facing a more challenging part of the business cycle, and there are some signs that economic momentum is slowing," said
The Energy Transition Will Create Compelling Opportunities
Mackenzie predicts that 2024 will bring continued investment and advancement in solar generation and storage, electric vehicle manufacturing and infrastructure, creating opportunities for investors looking to diversify into the space. Natural gas and carbon capture technology may take a more prominent role in achieving climate goals.
Innovation Will Likely Drive Growth
Investors seeking durable growth will navigate a more challenging landscape in 2024. As growth becomes scarcer, investors may find opportunities in businesses with strong competitive positions, high barriers to entry and healthy balance sheets. Artificial intelligence, the experience economy and the energy sector represent compelling opportunities for growth and innovation in the year ahead.
"Looking to 2024, it will be important for investors to remain diversified and maintain a portfolio that is aligned with their risk tolerance. Focusing on quality investments and capitalizing on growth potential will help investors who are seeking returns navigate the uncertainty in the markets as economic indicators such as inflation and interest rates return to normalized levels," concluded
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