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Investment Outlook

2024 outlook: Past the peak

Global Investment Committee
Quiraing mountains sunset at Isle of Skye, Scottish highlands, United Kingdom

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Key takeaways


Past the peak: But not downhill yet

Saira Malik, Chief Investment Officer

Our previous outlook, Stay in the game, reinforced a key investment theme we’ve been advocating throughout 2023: Get off the sidelines. Lighten your cash holdings. Stop waiting for the one perfect moment that might never arrive. This tenet still applies, but for wary investors needing additional clarity, a new observation may help: Both global inflation and central bank tightening have most likely peaked for this cycle.

Acknowledging that these twin peaks are behind us doesn’t mean investors can simply glide down the mountain, obstacle-free. In fact, we anticipate more tough sledding ahead. But with the lay of the land now in sharper relief, we can assess which portfolio allocation decisions offer the clearest path forward.

While U.S. inflation has crested, it’s still higher than the U.S. Federal Reserve’s 2% target. Pinpointing how rapidly it falls from here is no simple task, but our analysis suggests further moderation over the course of 2024.

Policy rates aren’t poised to plunge from their precipice either. Instead, they’ve more than likely plateaued — extending the “higher-for-longer” rate environment and making the trajectory of monetary policy for the next few quarters look like a cross-country trek rather than a downhill run.

We’ve already seen markets get ahead of their skis at various points in this cycle, prematurely anticipating rate cuts. And they may be gearing up to be let down again, judging by the number and pace of cuts they’re pricing in for next year. In fact, rates probably won’t be lowered until the cumulative (and lagging) impacts of the Fed’s historic hawkishness come home to roost in the form of a mild recession, which we expect will occur in the second half of 2024.

Against this backdrop, our current outlook emphasizes the following investment themes:

Follow the trails to fixed income. Though bond yields have retreated from their cycle highs in October, investors can still take advantage of today’s yields by overweighting fixed income in their portfolios. We anticipate intermediate- to longer-maturity yields will decline modestly, creating attractive return opportunities across higher-quality fixed income segments.

Deploy cash into areas of relative value. Despite the clarified investment terrain, a fog of doubt remains for many investors. The longer they delay, the more opportunities they miss. One way to get moving is to dollar-cost-average their way back to their strategic allocations, leaning into areas that offer the best relative value, as discussed throughout our year-ahead outlook.

Get real with portfolio positioning. Real assets, both public and private, figure prominently in our guidance. These asset classes can thrive during periods of still-elevated (albeit moderating) inflation, while offering potential resilience during economic slowdowns or contractions. Real estate, infrastructure and farmland are among the categories we favor.

Bottom line: For those who may still be waiting, it’s time to start making tracks. And while we’re confident the most challenging peaks will continue to recede from view, we’ll be on the lookout — as always — for twists and turns ahead.

As Nuveen’s CIO and leader of our Global Investment Committee, Saira drives market and investment insights, delivers client asset allocation views and brings together the firm’s most senior investment leaders to deliver our best thinking and actionable investment ideas. In addition, she chairs Nuveen’s Equities Investment Council and is a portfolio manager for several key investment strategies.

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All market and economic data from Bloomberg, FactSet and Morningstar.

The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This material may contain “forward-looking” information that is not purely historical in nature.

Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. Any changes to assumptions that may have been made in preparing this material could have a material impact on the information presented herein by way of example. Performance data shown represents past performance and does not predict or guarantee future results. Investing involves risk; principal loss is possible.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. For term definitions and index descriptions, please access the glossary on Please note, it is not possible to invest directly in an index.

Important information on risk
All investments carry a certain degree of risk and there is no assurance that an investment will provide positive performance over any period of time. Equity investing involves risk. Investments are also subject to political, currency and regulatory risks. These risks may be magnified in emerging markets. Diversification is a technique to help reduce risk. There is no guarantee that diversification will protect against a loss of income. Investing in municipal bonds involves risks such as interest rate risk, credit risk and market risk, including the possible loss of principal. The value of the portfolio will fluctuate based on the value of the underlying securities. There are special risks associated with investments in high yield bonds, hedging activities and the potential use of leverage. Portfolios that include lower rated municipal bonds, commonly referred to as “high yield” or “junk” bonds, which are considered to be speculative, the credit and investment risk is heightened for the portfolio. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC/CC/C and D are below-investment grade ratings. As an asset class, real assets are less developed, more illiquid, and less transparent compared to traditional asset classes. Investments will be subject to risks generally associated with the ownership of real estate-related assets and foreign investing, including changes in economic conditions, currency values, environmental risks, the cost of and ability to obtain insurance, and risks related to leasing of properties. Investors should be aware that alternative investments including private equity and private debt are speculative, subject to substantial risks including the risks associated with limited liquidity, the use of leverage, short sales and concentrated investments and may involve complex tax structures and investment strategies. Alternative investments may be illiquid, there may be no liquid secondary market or ready purchasers for such securities, they may not be required to provide periodic pricing or valuation information to investors, there may be delays in distributing tax information to investors, they are not subject to the same regulatory requirements as other types of pooled investment vehicles, and they may be subject to high fees and expenses, which will reduce profits. Alternative investments are not appropriate for all investors and should not constitute an entire investment program. Investors may lose all or substantially all of the capital invested. The historical returns achieved by alternative asset vehicles is not a prediction of future performance or a guarantee of future results, and there can be no assurance that comparable returns will be achieved by any strategy. Impact investing and/or Environmental, Social and Governance (ESG) managers may take into consideration factors beyond traditional financial information to select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market.

Nuveen, LLC provides investment services through its investment specialists.

This information does not constitute investment research as defined under MiFID.

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