Markets Rally on Inflation Optimism, But Risks Remain for 2024
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Equity markets are rallying on optimism about falling inflation and earnings growth, but risks remain.
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Base case is for modest further gains in 2024, with quality fixed income attractive. Wide range of risks could still spoil the outlook.
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Investors can reduce threats via structured products, yield strategies, commodities, gold, macro funds and multi-strategy funds.
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Key risks are inflation slowing less than expected, geopolitical tensions, dysfunctional US budget process and presidential election.
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While positive returns expected, investors should consider strategies to smooth returns and mitigate drawdowns.