In the ever-changing landscape of financial markets, 2023 defied expectations, with highly anticipated recessions in Australia and the U.S. failing to materialise. But the macroeconomic insights of Gavekal Research, from all the way back to 1978 – that innovative growth stocks with pricing power do well amid disinflation and positive economic growth –, has proven consistently prescient.

Last year witnessed the remarkable ascent of the ‘Magnificent Seven’ mega-cap technology stocks, a testament to the enduring influence of disinflation and positive economic growth on innovative companies with pricing power.

As we transition to 2024, a combination of generally higher yields, and arguably reasonable equity valuations for another group of innovative growth companies, paints a favourable outlook for returns across various asset classes.

The current economic backdrop, combined with relatively attractive interest rates, presents a variety of investment options, greater than we’ve seen since before the pandemic. And while the echoes of the pandemic continue to reverberate, the focus of this whitepaper shifts to the future, offering insights into strategic opportunities, the resilience of smaller companies, the allure of private credit, and considerations for navigating the evolving financial landscape.