Economic & Stock Market Risks 2024

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While it's true we can't predict the exact future of the economy, it is prudent to examine the potential risks as well as the central case. In this video, I consider some of these risks and their impact on investors. What could go wrong, the consequences and in my opinion which of these risks are most likely to materialise in 2024.
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Timestamps
00:00 Introduction
00:32 China
02:40 Higher Rates
02:54 Commercial Real Estate
07:15 Bank Bond Assets
08:19 Private Credit
10:56 Mortgage Costs
13:14 Corporate Debt
14:34 Runnable Money
16:20 Risks To Watch
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DISCLAIMER
All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future result.

[@Pensioncraft]

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[@michaelcaldwell3709]

Best financing Chanel on YT!!!

[@Pensioncraft]

Hi @michaelcaldwell3709 thank you very much - that's very kind. Ramin.

[@tenorref]

And the best smelling! 🤭

[@Asstronauts93]

Your volume is better this episode :)

[@qilu6313]

Thanks!

[@blackbaron0]

Thanks Ramin Yes absolutely agree with your last point there about scenario planning. Always think of how things might play out and alternative scenarios Much less chance of being caught out of things change and allows proper planning for how you allocate.

[@Pensioncraft]

Thanks for the comment @blackbaron0

[@qilu6313]

Thanks for another outlook video. Happy holidays!

[@Pensioncraft]

Same to you! @qilu6313

[@timwood101]

Superb analysis as always.

[@Pensioncraft]

Hi @timwood101 glad you liked it, thanks, Ramin.

[@mikehardwicke23]

Nice to have the inevitable prioritised. Thanks.

[@Pensioncraft]

Thanks @mikehardwicke23

[@josepha9313]

I'm undecided on stocks; Nasdaq is already +37% for the year, SP500 +26% can we expect further gains in 2024, not probable. Staying in cash and my bond funds for a bit longer. If I do get back in to stocks it will be via a mutual fund and not individual names. I also keep 10% in gold.

[@MrHotrod79]

Well balanced and reasoned as usual 👍

[@Pensioncraft]

Glad you enjoyed it @MrHotrod79

[@rayok434]

Thank you so much as always

[@Pensioncraft]

You are so welcome @rayok434

[@DPTrainor1]

Thank You.

[@Pensioncraft]

You're welcome @DPTrainor1

[@BDBD11]

I appreciate your perspective and the manner you present the same. It’s very helpful for the do it yourself investor.

[@Pensioncraft]

Thanks @BDBD11

[@goodq]

Thanks

[@Pensioncraft]

Hi @goodq Thank you! Much appreciated! Ramin

[@nickmichie7480]

Hey Ramin, I've seen you speak a lot about single government bonds lately. I would love to know/see exactly how to buy those as opposed to investing in bond funds. Could you share how to buy single bonds with a coupon/fixed interest. I'm sure it's very simple, but I'm a bit of a beginner.

[@timetraveller3063]

I luckily caught the back end if the S&p 500 rally...I wonder if there's going to be a big tech stock dump come January 24 as we saw in 2022? Seems like Wall Street does this when it suits them and stocks are frothy again

[@autilonskorr237]

Government is making the change from commercial property to residential easier and this might create an alternative route out of that market, or a different way for owners to create income reducing the impact.

[@jeancarloabreu]

Don't you use acoustic foam? Not sure if there's a tiny bit of echo

[@stevo728822]

Acoustic foam is useless.

[@bobbrown4069]

Well done Ramin. From the US side, the impacts of rising mortgage rates have a muted impact because of our financing options. Don’t know why they are so different than yours and Canada’s. Care to comment or address?

[@jimbob2hats925]

Combination of a decade+ of rapidly accelerating property prices vs income and majority of mortgages being 2-5 year fixes - people have just about been able to stretch to absorbing larger and larger percent of their monthly income going to mortgage whilst inflation was flat at

[@bobbrown4069]

But why no option to finance at longer duration 15 or 30 years? @@jimbob2hats925

[@mikerodent3164]

Ramin, could you answer something for me? My father died in 2022 and my brother and I have finally started getting money paid to us. This is several hundred thousand pounds each. I'm planning to put some of this at least into my SIPP but for the moment it's all going to go into index funds. I've already used up my ISA allowance 23-24 so this will be added to my existing non-tax-shelter investment account. I want to minimise liabilities for both Dividend Tax and CGT. Avoiding CGT probably means selling off some stuff in March and then buying new on April 6 (there is info about this strategy available). But I'm mainly interested in what you might have to say about avoiding dividend tax: is it the case that some index trackers produce more dividends than others? I presume that depends on the underlying companies: in a typical global investment index fund you'll find Apple, Google, etc., i.e. all the usual suspects. Is there some way of choosing to invest in index funds which are particularly growth-oriented rather than dividend-paying?

[@manxman5825]

It might be worth paying for a consultation with a tax accountant. You can get what are called 'accumulation' ETFs and funds but I guess you then have capital gains tax unless you move to somewhere without these taxes like the isle of Man. I'm no expert 😊

[@mikerodent3164]

@@manxman5825 Thanks. Yes it's all getting more and more annoying with thresholds frozen year after year, and also allowances dropping: CGT allowance is down to £3000 next year. Almost like they're expecting us to pay more taxes.

[@stevo728822]

These risks are well known and therefore pretty much priced in by now. The components of the commercial real estate sector are more sophisticated than shown here. What I am seeing is the first impact of AI on specific sectors. The early AI tools have impacted graphical design but will spread to other industries. But what it shows is the deflationary effect of AI on those industries. And in the longterm, AI tools are going to make pricing of everything much more accurate and less volatile than it has been. In the future it will become much harder to charge a higher price than the price AI tools have calculated from across the marketplace. This will happen when AI tools are implemented on real time datasets.

[@oakie007]

Really wanted a Doggie Christmas... 🎉🎉

[@letgotothemoon8174]

It is the time now to buy TLT ? Expecting rate cut next year....

[@mikerodent3164]

Nobody knows what that acronym means. Everyone thinks you just made it up to confuse us.

[@fredatlas4396]

​@@mikerodent3164 it's a Vanguard index fund available to US investors. It tracks long duration US treasuries, or US government treasury bonds with very long duration

[@informer-365]

If stock market always rise in the long term, why isn’t this video focusing on what goes right instead of what can go wrong? All financial news and risks are negative so what’s point if these don’t reflect on a equity tracker in the long run

[@M43782]

Because the video is about market risk. At the end he said he is 100% in stocks.

[@informer-365]

@@M43782 I know the video is about market risk, that was my point

[@stevegeek]

Hi Ramin, I note you say you are 100% equities (in your core portfolio). Does that mean you wouldn't recommend holding gov bonds? I'm sure I've heard you say they are worth holding, in previous videos. I currently have ~15% of my SIPP in UK gilts...plus 5% gold and some cash, besides a majority in equities. I've just retired btw. Thanks.

[@TomsPersonalFinance]

I think Ramin holds individual government bonds in his secondary portfolio that he calls his "fun portfolio".

[@stevegeek]

@@TomsPersonalFinance OK…thanks Tom

[@TomsPersonalFinance]

@@stevegeek No problem, Steve! it's fresh in my mind as he mentioned everything he had in his fun portfolio in a recent livestream 😊

[@klausip.7132]

You forget Japans Inflation and the cath trade risks …

[@LarryCohen188]

While MM funds delivered 5% at Short term, S&P 500 ETF has delivered 20% YTD. Have ppl already missed the rally. Plus what are the chances of rate hike again after USA elections?

[@Pensioncraft]

Hi @LarryCohen188 US markets are looking a bit toppy again at their 5y average forward P/E ratio (in mid-December 2023). But the World is not the US even in stock markets so I think buying global equity if you're invested for the long-term still makes sense (as it almost always does). Markets are pricing in almost a zero chance of a rate hike next year but I think it might happen if we get another inflation spike due to an energy shock. Or maybe just a really strong US economy that fuels more wage growth and inflation. But I'd put the probability of that pretty low (my guess, finger-in-the-air, would be less than 10%). Thanks, Ramin.

[@richardattridge3182]

I agree. I went the more diversified route, and starting purchasing Vanguard’s VWRP FTSE All world ETF, for a more global outlook, instead of just the S&P 500 ETF.

[@LarryCohen188]

Thanks Ramin, your an asset to our community. @@Pensioncraft

[@neilb2793]

QT will bring inflation in UK to zero then below (ie deflation) in second half of 2024. Economy will weaken, unemployment will rise and recession will be full blown, if not depression. Stocks will feel the pain then after a rise in first half of 2024. Gold looks good, not much to be had in bonds.

[@robertingram9404]

How long have you been predicting a recession for?

[@Lovemy911]

Somebody has a crystal ball I see 😂...

[@simonunion4657]

I moved all my shares into long date gilts and gov bonds both are rallying yet next year if a recession does happen in US bonds should still stay high why markets decline around the world then will rebalance if this happens this is the only time in my investing career I have moved to bonds with the once in a blue moon opportunity

[@Pensioncraft]

Hi @simonunion4657 that's extreme! Long duration gilts are very volatile and if we get anothe rinflation scare or positive UK growth news that could cause a big selloff in UK gilts. Not a recommendation, but maybe consider some low-duration fixed income exposure too where the yield is high (e.g. money market funds) but volatility and interest rate sensitivity and credit risk is almost zero. Then if your bet on yields falling goes wrong it may not be as painful. Thanks, Ramin.

[@simonunion4657]

Thank you for the advice I have gone for long end gilt from 38-2055 and locked in 4.7% and a top up with EM bonds bring a 5% will be retiring soon and not concerned if inflation does come back I am locked in early stage retirement. I do believe the world is giong through an inflation type bull whip effect after pandemic Debter nations need to kill inflation PS really enjoy your vids

[@MrYehboi]

@@Pensioncraftcould you maybe do a video on discounted bonds. This is something that looks like a good option to diversify away from equities, especially with interest rates potentially going down. But am not fully aware of all risks especially with long term gilts.

[@bluegtturbo]

A lot can go wrong in 2024 with the USA. The interest payments on it's debt is an eye watering 1 trillion dollars a year. That and the China situation, plus the middle east Tinder box and the Russian problem make it look like the time to move to fixed income out of stocks before the inevitable market crash?

[@CRAZYCR1T1C]

Biggest risk? War

[@eddychandra2509]

Money will flow to China ETF. Considering the room to bottom is very close.

[@PhillCurtis]

👍

[@princessunknown3158]

USA debts highest.. Seen credit cards debts trillions

[@GavinLawrence747]

tritax big box to the moon 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 😎

[@davidpearson243]

I do hope so had a fantastic passed 4 weeks

[@Maggiemay1942]

Brave to stay allocated 100% in equity in my opinion. I see massive volatility next year. Cans have been kicked down the road and heads been buried in the sand for too long now. How much longer can the Fed continue to prop up/instill confidence in a market with very shaky fundamentals and outlook? The many layers of maquillage applied during the GFC are starting to run now and the patient looking increasingly aneamic. Thanks as ever to Ramin for content of the highest quality.

[@Pensioncraft]

Hi @Maggiemay1942 I'll be 100% in equity for the next ten years so volatility is just par for the course. Thanks for taking the time to leave a positive comment! Ramin

[@MagicNash89]

"I see massive volatility next year." - I've been hearing this for years an years from so many people.

[@mikerodent3164]

@@MagicNash89 I can already see massive volatility next year. For example, the year 1929, or the year 2008. Those two years will continue to be precisely as volatile as they were.

[@MagicNash89]

@@mikerodent3164 Yup, one day doomsayers will be right, up until that day anyone's portfolio - or lach thereof - actually following the supposed "advice" that comes with these predictions will suffer. It will likely also suffer after it finally happens. Broken clock and all that.

[@jan2000nl]

If average returns in the long term is positive, as has been the history over the last 130 years, then what goes down will go up by more than it went down. It’s a question of time. So if you can stay invested for at least 10 years; ideally closer to 20, then no need to switch to lower long term return options like Bonds.