In the first half, gold shone with an increase of almost 20%. Due to the late drop in interest rates, bonds mostly moved sideways.
A solid first half: In the first half of 2024, the stock markets benefited from the positive momentum of the previous year. Indeed, all equity markets included in our asset allocation recorded double-digit gains in Swiss francs. Gold shone with an increase of almost 20%. Due to the late interest rate cut, bonds mostly moved sideways.
Mixed economic outlook: even if leading indicators show some stabilization in Europe, real growth impulses are lacking. In the United States, we expect a slowdown in economic dynamics in the second half of the year. Excess savings accumulated during the pandemic are exhausted and persistent high inflation and rising interest rates are increasingly weighing on consumption.
A timid drop in interest rates: the ECB corrected its key rates downwards in June, in Switzerland the SNB has already intervened twice. We expect the US Federal Reserve (Fed) to begin a decline in September. Overall, key rates will decline moderately during the second half of the year.
Increased volatility: In addition to economic risks, there is another factor of temporary uncertainty with the upcoming American elections. Historically, market volatility has always increased as elections approach. After the strong performance, the equity markets are running out of steam and intermediate declines can therefore be expected.
Large diversification: bonds will benefit from the fall in rates in the second half. In the investment category, we recommend focusing on high debtor quality as well as short to medium durations. As for equities, we favor the defensive Swiss equity market. Gold and real estate funds remain attractive as complementary investments.
