Wealth Outlook 2024 - Slow then grow

Foreword Andy Sieg Head of Wealth Welcome to Wealth Outlook 2024: Slow then Grow, Investing in the Markets’ Big Reset , Citi Global Wealth Investment’s annual report that presents our assessment of the global economy and the potential opportunities that follow for the coming year and beyond. As we enter 2024, we are faced with several conundrums as investors. Given how high interest rates are, how has the world economy avoided recession? Is a downturn imminent? With all of the geopolitical challenges, what should we consider when investing for the future? The Office of the Chief Investment Strategist at Citi Global Wealth, led by our Chief Investment Officer, David Bailin, has assembled this comprehensive analysis of potential opportunities and risks for this unique moment in time. It is clear that there is much to be optimistic about as the world economy returns to normal after the pandemic. We believe both bonds and stocks are attractive investments, making balanced portfolios valuable to investors. For qualified clients, alternative investments are seeing attractive entry points, as valuations are more modest now than they were during the “free money” period that just passed. The team also believes in potential opportunities in specific regions, industries and trends, such as tech supply chain infrastructure and investments in economic security. One risk for long-term investors can be the inclination to hold too much cash. We expect that rates will fall over the next 12-24 months and that returns on cash will drop rapidly. The Fed forecasts that its key policy rate will fall to a “longer run” normal of 2.5% over the next few years. Investment-grade bonds with a similar duration yield more than twice this rate today. This is why we encourage our clients to determine their true liquidity needs and take this moment to consider adding appropriate investments to diversified portfolios. Historically, balanced portfolios have outperformed cash over time. In addition to the Wealth Outlook 2024, we have created helpful summaries, including our Findings & Opportunities publication and our popular At-a-Glance, that distills all of our observations and insights. In my experience, markets lead economies and smart investors lead markets. Our insights are designed to help you seek your individual investment objectives, and our team is available to help you define and achieve your goals. We look forward to discussing our insights with you and hope that the ideas and opportunities presented will enrich your portfolios in 2024 and beyond.