Investor Newsletter January 2024
A Warm Welcome.
May I commence by wishing you and your families a very Happy New Year, which, hopefully, will be a good one for all.
In terms of investment performance after a very shaky start last year (primarily due to bond markets) over the first few months, global stock markets finished on a high note. The positive rally in the last quarter of 2023 was largely based on Interest rates appearing to have plateaued. Comments made by Christine Lagarde (President of the European Central Bank) reaffirmed this view when she stated that the “worst part is behind us” in the fight against inflation. The move in equities was supported by strong gains in bond markets, with sovereign and investment grade investment vehicles delivering solid returns.
Despite the economic and geopolitical uncertainty, equity markets, generally, had a great year and delivered the best performance since 2019. The MSCI World Index ended the year up 22 %; the S&P was up 24.3 %; the German DAX was up by 20.2 %; the French CAC was up by 16.6%; the ISEQ was up by 23.2%; the FTSE 100 up 3.8%. However, the NASDAQ gained 53.8 % with Amazon up by 85.7%; Google up by 63%; Meta up by 206%; and Apple up by 52.7 %. Particularly strong gains were delivered in the final quarter as the markets fundamentally reassessed the outlook for interest rates following a series of better-than-expected inflation readings in many countries.
Over 40 countries across the globe will have elections this year, something we highlighted in an Irish Times article last October. The first of these elections was decided on January 12th this year in Taiwan with new president Lai Ching-te at the helm. Early November 2024 will determine the last major election, the U.S Presidential election.
Challenges remain however in terms of “New House builds’’. Mortgage holders who are about to come off fixed 3- and 5-year rates are not, so far, being presented by lenders with alternatives that are reflective of the current Irish economic position. Additionally, “warehoused Covid debt‘’, increased VAT rates for the hospitality sector along with the introduction of the Pension Auto enrolment in 2025, add additional costs to employers, some of whom are struggling presently-so a cautionary note for now.
Changes to the State Pension benefit, which will present people with a choice to work up to age 70 in exchange for a higher state pension, came into effect on January 1st last. Further details are provided in the body of this Newsletter.
May I conclude by hoping that the various conflicts around the world and the human toll that has occurred will cease, being mindful that “you can’t go back and change the beginning, but you can start where you are and change the ending” (CS Lewis)
We sincerely hope that you enjoy reading our first newsletter of 2024.
Mark O’Sullivan, Managing Director
