Financial experts from four of the largest investment houses in Israel have presented their forecasts for 2024. They believe that identifying a sector or individual stock that will push the market forward has become more challenging due to geopolitical tensions and macro-economic changes. The experts do not expect a bonanza in the stock indices in Tel Aviv in 2024, as the stock exchange is weighted towards real estate and financial stocks. They also highlight the risk in Israel due to the war and the severe liquidity problems in the stock market. The experts recommend investing in broad indices, both in Israel and overseas, to find the next 'wonder stocks' that could outperform in the face of challenges and risks. They suggest that bank stocks, insurance companies, income-producing real estate, and the local telecommunications sector could be interesting investments in Israel. Overseas, they recommend technology and pharmaceutical stocks of mid-size companies. They caution against investing in local supermarket chains and local hotel stocks. The experts believe that the stocks of the 'magnificent seven' technology giants (Apple, Google, Microsoft, Amazon, Tesla, Nvidia, and Meta) are generously priced and may face regulatory challenges. They recommend being exposed to indices on Wall Street and believe that technology will lead the world in the next twenty years. The experts do not expect a return to almost-free mortgages and believe that the Bank of Israel's recent interest rate cut will not drastically change conditions in the local market. They expect a year in which the global economy will not experience an economic boom but will also not slide. They highlight the risks of geopolitical tensions and emphasize the importance of interest rates and surprises in determining market performance. Overall, they maintain a cautiously optimistic outlook for the global economy in 2024.
However, investment experts warn that there are unforeseen risks in 2024 that investors may not be considering. According to Ken Fisher, a financial analyst, high-profile global events such as the wars in Ukraine and Israel and Gaza are already priced in by markets. The biggest threats to markets are economically significant events that have crept upon us broadly unseen. Fisher highlights potential surprises for later in 2024 and into 2025, including risks from the nuclear armed triangle of China, India, and Pakistan, tensions along the India-China border, changes to rules for Bitcoin, an excessively punitive approach to AI, and politics. He emphasizes that the biggest risk of all is the one that no one saw coming [76709aa2].