As we step into 2024, the investment landscape presents a dynamic mix of challenges and opportunities. We have identified six key areas where we believe investors can potentially reap significant benefits. This selection spans across equity, fixed income, and cryptocurrency sectors, providing the opportunity to capitalize on evolving market conditions through a diversified portfolio.

Broad Market Equity

In 2023, the ‘Magnificent 7’ – comprising of tech giants Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia – dominated the S&P 500®, representing about 30% of its market cap1. These companies significantly outperformed the broader market, with a collective gain of 75% compared to just 6% for the other stocks in the index1​​​​. This market dominance sets the stage for our broad market exposure recommendation going into 2024. While we don’t expect these tech giants to significantly decline in value, we believe there is potential for the rest of the market to catch up, especially if the US avoids a recession and achieves a soft landing. We have already seen the rally start to broaden with 78% of the stocks in the S&P 500® trading above their 200-day moving averages during the month of December, matching the highest levels all year. Hence, we favour broad market exposure with continued volatility and a non-linear return, well-suited for our actively managed covered call program.


Technology companies have lead market returns over the last decade on the back of continued innovation. Factors such as the advancement and widespread adoption of Artificial Intelligence (AI), ongoing digital transformation, and the shift towards cloud computing are key drivers that could propel long-term growth in the technology sector. Interest rate policies heavily influence the technology sector. Technology companies, who typically focus on long-term growth, are heavily reliant on borrowing for research and development and are therefore impacted by higher borrowing costs​​​​. In addition, valuations of growth companies with high future cashflows relative to current cashflows are much more sensitive to changes in the discount rates than mature companies. 2023 witnessed a rebound for the tech sector, buoyed by expectations of rate cuts in 2024 and advances in AI. Over the last month, the market rally has started broadening outside of big tech. Long term growth expectations for the sector, coupled with our expectation of a market rally that extends beyond the ‘Magnificent 7’, leads us to favour a diversified approach to technology investing.

Canadian Financials

2023 was a pivotal year for financials, marked by the collapse of Silicon Valley Bank and subsequent bank closures and acquisitions. Looking into 2024, we believe Canadian financials could present an interesting investment opportunity. The trajectory of interest rates and its impact on consumer finances and mortgage renewals will be crucial, with a significant proportion of residential mortgages up for renewal in the next few years. The banks have been provisioning for future credit losses in anticipation of “higher for longer” rates. We believe the Canadian financial sector, particularly banks, could rebound from its current undervalued state and return to normalization in terms of stock market returns, earnings growth, and valuations. While banks generally struggled last year, life insurers experienced strong growth led by Great-West Lifeco which returned 38% in 2023. Unlike banks, lifecos are not susceptible to surging loan losses during recessions since they do not face the same threats. Economic downturns do not lead to a surge in property claims, as P&C insurers experience, and lifecos are designed and regulated to maintain stability. In this environment, lifecos are witnessing a positive trend of increasing premiums, particularly in commercial insurance. Additionally, they are strategically reducing exposure to riskier clients and business lines, resulting in rising prices and improved profitability. With the Canadian economy showing signs of softening consumer spending, there’s a growing anticipation of a potential easing in monetary policy, which could relieve pressure on households and the financial sector. Despite current challenges, Canadian financials could offer strategic opportunities for long term investors. With robust capital levels and a history of resilience, the sector could benefit from a favourable shift in economic conditions and a potential easing of monetary policy in the future.


We believe the healthcare sector presents an intriguing investment opportunity in 2024, especially with the recent breakthroughs in weight-loss drugs. Goldman Sachs predicts the market for these drugs could reach $100 billion by 2030, up from the current $6 billion. The current leaders in the industry, Eli Lilly and Novo Nordisk are expected to control a combined 80% of the weight-loss market. Further fueling the excitement surrounding these drugs, several recent clinical trials show additional health benefits including, reduced risk of heart attacks, stroke, and Alzheimer’s, as well as, combatting kidney disease. These drugs have become so popular that the drug makers are struggling to keep up with demand. In addition, the integration of Generative AI and other digital technologies is expected to bring substantial improvements in operational efficiency, patient care, and cost reduction to the overall healthcare sector. The advancements are anticipated to revolutionize healthcare delivery, making it a pivotal area for investment. These trends, combined with supportive valuations, make the healthcare sector a compelling choice for investors looking towards 2024 and beyond.

Long Duration Bonds

Heading into 2024, the investment case for longer-duration fixed income looks increasingly attractive due to several key factors. With the Federal Reserve nearing the end of its rate hike cycle, there’s a shift in focus from short-duration to longer-duration bonds. Historically, after the peak of policy rate hikes, longer-duration bonds have shown a tendency to outperform, as seen in various monetary policy cycles. This shift comes at a time when bond investing, with higher base rates, is more attractive than it has been in the last sixteen years, raising the potential for equity-like returns from fixed income instruments. This view on duration can be expressed in portfolios by extending maturities through laddering, exposing the portfolio to a higher degree of rate sensitivity while minimizing return volatility, which should lead to a smoother path of returns. Specifically, we like long duration US treasuries because the volatility in the underlying provides significant opportunity for our actively managed option program. Combining a longer-duration fixed income solution with a covered call program allows investors to capitalize on capital gains as yields decline while simultaneously providing enhanced tax-efficient income through the options program.


In 2023, Bitcoin emerged as the top-performing asset class, bolstered by the market’s risk-on attitude and heightened expectations for the approval of a US Spot Bitcoin ETF. This anticipation contributed to a notable rise in the price of Bitcoin which was up almost 160% last year. Looking ahead to 2024 and beyond, the potential approval of a spot Bitcoin ETF is expected to further enhance institutional investor interest and confidence in Bitcoin, making it a compelling inclusion in a diversified investment portfolio.





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