That time has rolled around once again where I must invite ridicule by outlining my 10 predictions for the year ahead. As always these don’t necessarily reflect how our multi-asset portfolios are positioned, but more a reflection of my bluer-sky thinking type thoughts. Pure Coombsy if you will. Cooked up as a reaction to the usual drier type of investment outlooks that litter my inbox in the lead-up to the new year.
To use a well hackneyed phrase, 2023 was a rollercoaster of a year. Dominated by a stock market phenomenon named after a film starring Yul Brynner as cigar-chomping gunfighter Chris Adams, and a new range of drugs that would leave the Great British Bake Off an irrelevance. Navigating these, along with a never-ending debate around whether we would see Goldilocks or an Eddie the Eagle (hard landing) that created unprecedented interest rate volatility, meant many sleepless nights for fund managers. I can hear those small violins wailing.
Anyway, is next year going to be calmer? I wouldn’t bet on it. So, with some trepidation, here goes:
- UK 10-year gilt yield falls to 2% as UK unemployment rises following three quarters of GDP contraction
- Presidential hopeful Donald Trump avoids prison and the White House, retiring gracefully back to Key Largo, congratulating Joe Biden as a worthy winner. No, not really – Biden won't become president either…
- The Magnificent Seven will be replaced by Enid Blyton’s Secret Seven. Obviously, I cannot tell you which stocks make up this cohort, until I reveal them in our end-of-the-year podcast, which means I am guaranteed a point when toting up my results at the end of 2024. Hint – probably healthcare related
- Copper will be the best-performing commodity as China heats up again
- US equities outperform Europe (an old favourite). Can’t see a European Apple anytime soon…
- Demand for EV cars drops a further 20% as German pressure leads the EU to roll back its ban on combustion engines from 2035 to 2040. In a fierce power play, it bans Renaults in its domestic market from 2026 to annoy the French (I’m joshing, it can’t do this without leaving the EU)
- Labour wins an overall majority under leader Keir Starmer as the Tories crumble and the SNP loses all but five seats. The King’s speech is delayed so Starmer can think of some policies to distract from the fact there’s no money to spend. Joining the EU as associate member will be key strategic policy causing sterling to rally past $1.40
- Passive investing loses lustre as investors realise they are wasting their capital on companies with poor performing management teams. The tide has gone out given the interest rate rises of the past 18 months and there will be many naturist bathers on show
- A new law will be introduced banning central bankers from holding press conferences. Sorry, I was daydreaming in utopia. In reality, we will once again be enthralled by the adequate and the mediocre. Bank of England boss Andrew Bailey will lose out to US Federal Reserve Chair Jay Powell in the credibility stakes
- The GB team will not appear at the Paris Olympiad as they are stuck in Dover due to passport delays at the border and they are sent to Rwanda by mistake
As for last year? I managed 3.5 out of 10, compared with 5.5 points in 2022. But many of my predictions failed in spectacularly cinematic ways. Take a listen to our latest podcast and you’ll see what I mean!
Tune in to The Sharpe End — a multi-asset investing podcast from Rathbones. You can listen here or wherever you get your podcasts. New episodes monthly.
