Insights for investors in 2024 and beyond
Navigating today's global economy can feel like a turbulent ride, with geopolitical challenges, market fluctuations, and shifting economic forces creating tremendous uncertainty. A sure-fire way to overcome fear of the unknown is to arm oneself with valued insights, as well as partnering with a trusted investment manager who isable to help navigate a path forward.
A select group of Standard Bank clients and partners had the privilege recently to get such insights at our investment seminar, The World in 2024: Fasten Your Seatbelts. One session was hosted by noted political economy analyst Daniel Silke who shared his insights into the forces at play globally and how investors can prepare themselves to minimise risk.
He offered four key insights that can help you get a better perspective on the current environment, and how events might affect you.
The global landscape
One doesn’t have to look far to see geopolitical tensions playing out – from the Russian invasion of Ukraine, conflicts in the Middle East, and potential flashpoints involving China and Taiwan – that all contribute to the current global uncertainty.
"We are seeing an unprecedented number of concurrent global crises or geopolitical risk factors which are open-ended and unresolved," Silke said. “These are crises which threaten to undermine security and up-end relationships in a way which hasn’t been seen since the end of the Cold War and the fall of the Berlin Wall.”
He noted that the underlying theme is a shift in traditional global power. China is the obvious candidate leading this race for economic and technological dominance, which is having wider repercussions.
Silke said the subsequent rise of the Gulf states and BRICS (Brazil, Russia, India, China, South Africa) economic grouping are signs of a move to redraw the political boundaries away from the influence of the west.
As such countries try to “extend power to regional powers near their own borders”, he said the knock-on effect would be felt in areas of commerce and trade.
Growth sectors and opportunities
While a lot of attention has been focused on the US tech sector over the past 30 years, rapid advances in other regions are starting to challenge this long-held dominance.
Economies like Indonesia and Philippines look extremely attractive as beneficiaries of trade that has shifted from China.
“I also like India, which is showing very good growth in the short term at least. India is now set to become the intellectual property capital of the world, and as the country leads that race, its emerging strength is helping to upgrade its infrastructure, which is probably at least two decades behind that of China.”
Africa, on the other hand, presents diverse opportunities, including natural resources, manufacturing, and emerging technologies.
“While generalising can be risky, Africa as a whole should grow at about 3.8% this year, going up to around 4% in 2025. While it is coming off a relatively low base, that puts Africa’s growth at more than double that of many of the advanced economies in the world.”
The continent is not without risks, he cautioned, with the threat of military coups and conflict ever-present, while rising debt could divert funds from much-needed infrastructure projects.
“I am also concerned about the potential for a ‘new scramble’ for Africa, as rare earth materials, critical for the manufacture of EVs, defence tools and IT, becoming more and more highly sought and create potential for conflict,” he said.
Challenges and mitigation
In the short term, 2024 is likely to be a bumpy ride due to the increased uncertainty brought on by more than 40 countries around the globe holding national elections.
The US election is possibly the most polarising, which could contribute to further erosion of trust in government in the world’s largest democracy.
“Another issue is how the next administration will respond to China and also how the country is going to deal with its skyrocketing debt problem, which isn’t going to go away,” he said.
Shielding your assets from all these risks demands a renewed commitment to diversifying portfolios. This has been a staple of many successful investment strategies, and should form part of any investors’ armoury.
“However individual economies perform, those big issues show no sign of going away and will have an influence on the markets so as we look at the world in 2024, it really is time to fasten your seatbelts and prepare for a turbulent ride,” he concluded.
Plotting a way forward
If you want to be prepared for whatever the future might bring, Standard Bank Jersey Limited has a team of investment specialists available to consult with you on solutions that can provide that ‘financial seatbelt’. While there are many solutions and options to consider, there is no single solution that’s appropriate for all investors.
We therefore encourage you to get in touch with one of our investment specialists able to help to craft an investment plan that can help you achieve your financial goals, in spite of the uncertainty.