Wealth Outlook 2024 - Slow then grow

25 Wealth Outlook 2024 | Our outlook Geopolitics and elections: assessing risk in 2024 Considerations: • History shows that 90% of geopolitical events have not changed the direction of the world economy. We believe investors should stay invested seek potential opportunities through events that merely cause fear, but don’t deliver catastrophe, while being prepared for the events that do. • The share of geopolitically-vulnerable energy supplies the world relies on has increased. This points to investments in Western energy supplies – from conventional fossil fuels to alternatives – may mitigate such risks while maintaining energy security. Similarly, we see cybersecurity software as a critical defensive investment. • General elections loom in the year ahead in nations whose equity markets comprise 68% of global market cap. However, nearly all of this is the US, where the combination of who controls the White House, Senate and House of Representatives is essentially unforecastable at this time. A change in control might have dramatic impact on foreign policy and/or domestic policy. It’s happened. Global investor clients have asked us to consider the implications of nuclear war between Russia and the United States. Purposefully or otherwise, some have altered their investment strategies to attempt to address this risk. But there are no good market hedges for an existential threat to human life. When “worst-case scenario” investing becomes a focus, the typical response is inaction. This degrades core portfolios and weakens returns over the long term (please see FIGURE 12 in our Slow then grow on page 10 , and our Strategic Return Estimates¹ ¹ Source: Citi Global Wealth Allocation Team. Strategic Return Estimates (SREs) for 2024 based on data October 2023, prior Strategic Return Estimates for 2023 (based on data fromOctober 2022) and 2022 (based on data as of October 2021). Returns estimated in US Dollars. All estimates are expressions of opinion and are subject to change without notice and are not intended to be a guarantee of future events. Strategic Return Estimates are no guarantee of future performance. Past performance is no guarantee of future returns. Strategic Return Estimates based on indices are Citi Global Wealth’s forecast of returns for specific asset classes (to which the index belongs) over a 10-year time horizon. Indices are used to proxy for each asset class. The forecast for each specific asset class is made using a proprietary methodology that is appropriate for that asset class. Equity asset classes utilize a proprietary forecastingmethodology based on the assumption that equity valuations revert to their long-term trend over time. The methodology is built around specific valuation measures that require several stages of calculation. Assumptions on the projected growth of earnings and dividends are additionally applied to calculate the SRE of the equity asset class. Fixed Income asset class forecasts use a proprietary forecasting methodology that is based on current yield levels. Other asset classes utilize other specific forecasting methodologies. SRE do not reflect the deduction of client fees and expenses. Past performance is not indicative of future results. Future rates of return cannot be predicted with certainty. Investments that pay higher rates of return are often subject to higher risk and greater potential loss in an extreme scenario. The actual rate of return on investments can vary widely. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index. All SRE information shown above is hypothetical not the actual performance of any client account. Hypothetical information reflects the application of a model methodology and selection of securities in hindsight. No hypothetical record can completely account for the impact of financial risk in actual trading. in Core portfolios could be ready to shine on page 34 ) .