Are We There Yet? Signs of "Normal" in 2024

In Pathstone’s December 2022 CIO Letter, we forecasted a “bumpy road back to normal.” We believed that despite the severity of the moves seen in 2022, the market and economy were on the road back to a scenario where more persistent returns would emerge.  Nearly a year later, we have certainly seen some bumps (three major bank failures, debt ceiling crises, continued geopolitical tensions), but we also see signs for smoother roads ahead: The Fed has signaled the end of its rate-hiking cycle, the economy has strengthened while inflation has cooled, and equity markets have rebounded. Investors may now be asking, “Are we there yet?”

To address that question, we need to understand what “there” means.

In this edition of our annual year-end letter, Pathstone’s Chief Investment Office examines the state of the markets and economy and offers insights on where we are on our journey and what our destination might be in 2024. Our leaders will address the macro outlook, what a long-term “normal” environment might look like, emerging secular trends poised to break free of the economic cycle, as well current trends and actionable investment ideas across listed and private markets.

In this letter:

  • Economic Outlook: Reasons for Optimism
  • What Is Normal?
  • Investment Themes That Transcend the Cycle
  • Listed Markets: Fundamentals Are Back
  • Private Markets: Manager and Asset Selection Key
  • Closing Remarks: Creating a New Normal at Pathstone

DISCLOSURES

This letter and its content are for informational and educational purposes only and should not be used as the basis for any investment decision. The information contained herein is based on publicly available sources believed to be reliable but not a representation, expressed or implied, as to its accuracy, completeness or correctness. No information available through this communication is intended or should be construed as any advice, recommendation or endorsement from us as to any legal, tax, investment or other matters, nor shall be considered a solicitation or offer to buy or sell any security, future, option or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this communication constitutes investment advice or offers any opinion with respect to the suitability of any security, and this communication has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient. Past performance is no guarantee of future results. Additional information and disclosure on Pathstone is available via our Form ADV Part 2A, which is available upon request or at www.adviserinfo.sec.gov.

Any tax advice contained herein, including attachments, is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of (i) avoiding tax penalties that may be imposed on the taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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