Looking forward to 2025: Insights and lessons from a challenging year
As 2024 draws to a close, we reflect on insights and lessons from a challenging year filled with challenges and opportunities. From economic uncertainties and geopolitical tensions to market resilience and recovery, it’s been a journey that reinforced the importance of staying the course in investing.
Founder and Financial Adviser, Mark Reidford APFS, looks forward to 2025 in his year end blog: Insights and Lessons from a Challenging Year.
Five years ago, we were only months from a global pandemic which caused huge global economic disruption. Since then, we have had Russia invade Ukraine, a rapid increase in inflation and interest rates, Middle East tensions, and disappointment over the pace of interest rate cuts.
Over the past year alone, there have been major political elections in the UK, US and France. Mixed economic data globally, questions about when massive investment into AI will result in positive financial returns; the worry list goes on and on. History suggests there will always be something for markets to worry about. It’s often called ‘noise’ and it’s important not to let it overwhelm you.
When I think about ‘noise’, my mind drifts specifically to Chancellor Reeves’ inaugural budget. We have never seen speculation, rumour, and misinformation before a Budget like we did in 2024. As is the case with market volatility, the counsel to our clients to ‘do nothing’ remains one of Innes Reid’s most important, yet undervalued, contributions.
Having dealt with all of the above it has been a good year to be invested. Each one of the major share indices around the world has delivered a positive total return over the past 12 months, factoring in share price performance and dividends.
As proven time and time again, sticking to the plan, holding your nerve and remaining invested in the markets reaps rewards. Patience is vital with investing and what has happened over the past one and five years perfectly illustrates the point.
Now we turn to 2025
We remain conscious that across global markets, risks remain high with multiple volatile geopolitical situations. In addition, we have Trump v2.0’s radical policy agenda which has fuelled some financial market uncertainty, but market commentators believe the central macroeconomic outlook remains favourable – for now, and there is no expectation of a material slowdown in 2025 which should help deliver positive equity returns, while credit markets should provide attractive income opportunities.
It would be fair to say, we are less bullish about markets than we were 12 months ago, although we are cautiously optimistic for 2025. The global economy continues to be solid with inflation falling, interest rates coming down and no sign of unemployment rising significantly in the major economies.
Ultimately, growth, stable inflation and lower interest rates should support markets and deliver positive outcomes.
Wishing you a Happy New Year
On behalf of all of the Innes Reid team, we would like to thank all our valued clients for your continued support. We wish you a prosperous and enjoyable end to 2024 and a Happy New Year.
