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Source: Simply Wall St


Challenges globally in early 2024:


Ukraine:


Stalemate in the war, despite Western support.

Difficulty delivering advanced weapons.

Ukrainian counter-offensive faltered.

Resource depletion and potential collapse of Ukrainian forces.

Putin needs only hold current territory to claim victory.



International Pariah Status for Putin:


Indicted by ICC but still travels freely and receives support.

Western sanctions ineffective due to alternative markets.

Many nations indifferent to Russian atrocities in Ukraine.


Gaza War:


Diverts attention and resources from Ukraine.

Makes West appear complicit in destruction of Gaza.

Raises Iranian influence and fuels anti-Western sentiment.


Iran:


Nuclear ambitions and expanding influence through proxy militias.

Close alliance with Russia, supplying drones for Ukraine war.


Africa's Sahel:


Military coups oust pro-Western leaders and invite Wagner Group mercenaries.

South Africa joins naval exercises with Russia and China.


North Korea:


Forged close ties with Russia, sending weapons for Ukraine war.

Continued ballistic missile tests.


China:


Assertive claims over South China Sea and Taiwan.


Glimmer of Hope:


Renewed defensive purpose of NATO.

Gaza war may force renewed focus on Palestinian statehood.


Overall:


The West is facing numerous setbacks on the global stage.

Ukraine war is not progressing as hoped, and Putin enjoys relative international impunity.

Other conflicts and alliances further challenge Western interests.

A glimmer of hope exists in a potential renewed effort towards resolving the Israeli-Palestinian conflict.


As always talk to your adviser within the Just Service Network if you would like information or otherwise review your personal financial planning.


For all enquiries talk to your adviser or email info@justserviceglobal.com



Regards

The Just Service Client Service Team

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  • Writer's pictureJust Service Global


Sources: The Just Service Global Investment Committee, Momentum fund managers (Harmony funds) and Dominion Fund management


7 Risks for Investors in 2024: A Quick Guide (from Momentum)


1. Inflation: Uncomfortably high across major economies, likely leading to slower growth and tighter financial conditions. Conclusion: Brace for stagnation and rising real interest rates.


2. Consumer Resilience: Savings dwindling, unemployment rising; expect reduced spending and higher debt delinquencies. Conclusion: Consumer debt could become a drag on the US economy.


3. China: Slowing growth, fiscal woes, and property market troubles add deflationary pressure globally. Conclusion: Limited Chinese stimulus could dampen recovery elsewhere.


4. Public Debt Levels: Mounting US debt and dysfunctional Congress create uncertainty and limit fiscal flexibility. Conclusion: Debt ceiling showdown could spook markets in 2024.


5. Geopolitics: Ongoing conflicts in Ukraine and the Middle East, plus US-China rivalry, raise security concerns and disrupt trade. Conclusion: Geopolitical turbulence could be a recurring market headwind.


6. Elections: Tight races in key countries, including the US Presidential election, could create market volatility depending on outcomes. Conclusion: US election's potential for a Biden-Trump rematch adds another layer of uncertainty.


7. Tightening Cycle: Mini-banking crisis in 2023 highlights risks, but overall strong balance sheets mitigate systemic concerns. Conclusion: Isolated damage in over-leveraged sectors like commercial real estate is possible.


Our view for 2024


We at Just Service agree with the recent writings of Dominion. They suggest putting aside technology sector (see below for the high growth areas) to consider other growth areas. There's an "old economy" giant quietly powering our modern world, and it's not getting enough love: mining companies and the energy sector.


These might seem like dusty relics of the 20th century, but here's the reality:


Metals like steel and copper aren't consumed, they're invested in. Buildings, roads, vehicles – these are the foundations of a thriving economy, and they're built on mountains of mined metals.

Mining efficiency has skyrocketed. We can now produce a tonne of copper with just 1% of the effort it took in 1800! Innovation keeps driving down costs, fueling economic growth.

But the easy gains are behind us. New breakthroughs are needed to maintain this efficiency, and labor costs and ore quality are pushing prices upwards.

This is good news for mining companies with top-quality assets. Rising costs squeeze out weaker players, boosting the profits of efficient producers.

And the demand for metals is only going to grow. Billions of people across the globe are still catching up with industrialization, and the green energy revolution needs a ton of copper.


The bottom line: Mining stocks are a powerful play on long-term trends like global growth and clean energy. They offer:


Exposure to rising metal prices: As demand outstrips supply, your investments benefit.

A hedge against inflation: Metals hold their value well, protecting your portfolio from rising costs.

Diversification: Mining adds a different dimension to your portfolio, reducing risk and boosting potential returns.


Now back to technology: High-growth areas in Technology 2024


Artificial intelligence (AI): Expect advancements in areas like natural language processing, computer vision, and robotics, driving applications in healthcare, finance, and automation.

Cybersecurity: With increased online dependence, cybersecurity solutions will be crucial. Look for growth in threat detection, data protection, and identity management.

Cloud computing: The shift to cloud-based services continues, fueled by scalability and cost-efficiency. Cloud infrastructure, platform, and software (IaaS, PaaS, SaaS) providers will see strong demand.

Cleantech: Sustainability concerns drive investments in renewable energy, energy storage, and green technologies. Expect advancements in solar, wind, and clean transportation solutions.

Quantum computing: While still in its early stages, quantum computing has the potential to revolutionize numerous industries. Investments in research and development are increasing, making it a promising long-term prospect.


As always talk to your adviser within the Just Service Network if you would like information or otherwise review your personal financial planning.


For all enquiries email info@justserviceglobal.com


Regards

The Just Service Client Service Team

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Source: Just Service Global Investment Committee


Global Investment Outlook:


The global investment landscape for the next 6 to 12 months is expected to be characterized by a combination of moderate growth, persistent inflation, and central bank tightening. While economic growth is projected to slow from the rapid pace of 2022, it is still expected to remain positive in most major economies. Inflation is likely to remain elevated, driven by supply chain disruptions, energy prices, and strong consumer demand. Central banks are expected to continue raising interest rates to combat inflation, which could put some pressure on equity markets.


Impact of Geopolitical Conflicts:


The ongoing conflicts in Ukraine and the Middle East, specifically the ongoing tensions between Hamas and Israel, are having a significant impact on global markets. These conflicts are contributing to uncertainty and volatility, affecting various economic sectors and asset classes.


Energy Markets: The Ukraine war has disrupted energy supplies, leading to a surge in oil and gas prices. This has a direct impact on transportation costs, manufacturing costs, and consumer energy bills. The potential for further disruptions or sanctions on Russian energy exports could keep energy prices elevated, adding to inflationary pressures.


Commodity Markets: The conflicts have also affected other commodities, such as wheat, corn, and metals. Ukraine is a major exporter of wheat, and the war has disrupted planting and harvesting, leading to supply shortages and price increases. This could exacerbate food insecurity in some regions.


Equity Markets: The overall uncertainty and risk aversion caused by the conflicts have led to increased volatility in equity markets. Investors are reassessing their risk appetite and may shift their portfolios towards safer assets. This could affect the valuations of companies and overall market sentiment.


Regional Impacts: The conflicts have a more direct impact on the economies of the regions involved. Ukraine's economy is severely affected by the war, while Russia is facing sanctions and economic isolation. The Middle East conflict could affect economic activity and tourism in the region.


Geopolitical Risks: The escalation of these conflicts could lead to broader geopolitical tensions and instability, further affecting investor confidence and global economic cooperation. The potential for wider military involvement or the use of unconventional weapons could have severe consequences for global markets.


Global Outlook by Asset Class:


Equities:


Developed markets equities are expected to remain attractive due to the ongoing economic recovery, strong corporate earnings, and relatively attractive valuations. However, investors should be mindful of the potential impact of rising interest rates and geopolitical tensions on equity valuations.


Geographic Preferences:


Asia ex Japan offers diversification and growth potential, driven by strong economic fundamentals, rising middle-class consumption, and increasing digitalization. This region is particularly appealing due to its resilience during recent global economic challenges.


Europe is poised for a post-pandemic rebound, supported by fiscal stimulus measures, a favorable currency environment, and the potential resolution of geopolitical tensions.


Thematic Investments:


Sustainability and ESG aligned funds are gaining traction as investors prioritize responsible investing and environmental consciousness.


Technology and innovation funds continue to offer growth opportunities as technological advancements transform industries and most especially AI


Healthcare innovation (via technology) remains a key focus, driven by aging populations, increasing healthcare spending, and advancements in medical technology.


Alternatives:


Private equity continues to attract investors seeking diversification and potential for higher returns.


Hedge funds offer diversification and potential for uncorrelated returns amid a complex geopolitical and economic landscape.


As always talk to your adviser within the Just Service Network if you would like information or otherwise review your personal financial planning.


For all enquiries email info@justserviceglobal.com


Regards

The Just Service Client Service Team

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