Market Commentary 1 October 2024 - 31 December 2024
Welcome to 2025! We look forward to another year of working with you to achieve your financial goals. 2024 has proven to be a strong year for your portfolio as global inflation continued to slow, central banks began reducing interest rates, and global politics garnered investors’ attention. Returns for the 2024 year exceeded the returns we assume in our financial projections which is always pleasing as it means your goals may be more achievable now.
In particular, your US share portfolio performed well, underpinned by the continued strength of the US economy. The US consumer continues to be resilient and strong spending from US government is also supporting US economic growth. Artificial intelligence (AI) has also been a defining theme throughout 2024 with many companies in your portfolio benefiting from the innovation and growth that AI has enabled. We will be watching carefully to see if this phenomenon continues in 2025.
Broad and effective diversification continues to be an important principle for us when constructing your portfolio. In your report, we highlight a number of different elements of the diversification in your portfolio and how they have performed in isolation. Whilst some aspects (like US Stocks) had very strong years, others might not have been as strong (emerging markets). It is expected for the over and under performers to change year to year but understanding this dynamic can often provide investors with comfort.