It has been a while since I have written about the financial markets so I thought this month it would be good to provide a brief overview of recent events.
Last year, 2023 was a better year for investors with both fixed interest and equities bouncing back after one of the toughest years in 2022. We saw inflation starting to come down, although it was still above its targets, with central banks still using interest rates to try to bring inflation back down1.
However, in the early part of 2023 we saw confidence being shaken yet again by the failure of Silicon Valley Bank and several others, however the crisis was relatively contained and the Equities market began gradually edging up2. We then saw a lot of hype following the launch of AI’s Chat GPT 4 model. This was evident in the strong price increase of the largest technology companies, Meta, Apple, Amazon, Alphabet, Tesla, Microsoft, and perhaps the biggest AI beneficiary of all, NVIDIA. This group drove markets upwards in 2023 and they were named the ‘Magnificent Seven3.
However, it was not all good news, as although Cash was another sector to gain in 2023 due to the interest rate rises, it also meant that the property sector suffered, and we saw the market fall in China.
In 2024 we have seen the rise in the US and UK equity markets continue. Although the Japanese equity market had a blip in the summer, the Nikkei is up from the start of the year, and I think it is fair to say that the Gilt sector has had a better performance in the last 12 months.
I have written previously about the importance of having a diverse portfolio as I feel it’s hard to predict the winners and losers for each year. I also think that it is important to measure a fund’s performance by comparing it against others in the same sector, comparing like with like. If you do hold investments and want to discuss them why not pick up the phone today and book a free without obligation consultation.
*Please note that past performance is not necessarily indicative of future results
1Statista
2FTSE 100, closed 6th Jan 23 7699.49. 14th Apr 23 7871.91
3Mellon, Feb 2024