About this episode
Markets started the year with high expectations and high valuations. But volatility and expensive equities are just a few of the challenges facing investors in 2024.
Chief U.S. Economist Lara Rhame and Executive Director Research Andrew Korz sit down to discuss their latest chartbook examining the five key challenges facing investors today—and how alternatives may address those challenges and provide potential opportunities.
Transcript excerpt
Lara Rhame:
Welcome back to FireSide, a podcast from FS Investments. I’m Lara Rhame, Chief U.S. Economist here. And today, Andrew Korz and I are eager to talk about a piece we wrote to kick off the year, our 2024 Market Outlook. It’s a chartbook that looks at five challenges and five opportunities in markets.
And by way of introduction, Andrew Korz is an Executive Director on the research team and, as my partner in thought leadership, he makes me smarter every day. Andrew, welcome.
Andrew Korz:
Hey, it’s great to be here, Lara.
Lara Rhame:
Let’s jump in because this is one where I’m not interviewing you and you’re not interviewing me—we wrote it together. So, let’s take a step back. Why did we write this?
Andrew Korz:
That’s a good question. Why do we write anything? No, I think there’s two reasons. I think number one, it’s a new year and people put out new outlooks in a new year. There’s nothing particularly different between December 29 and January 3, but I think it does give us an opportunity to reset, rethink where we are, look at markets and reassess.
Lara Rhame:
And let’s think where we were this time last year. Pervasive concerns of recession were dominant in January 2023, right, a year ago. And we’re recording this on February 2 (though it still feels like January to me—I’m still getting my head in the game).
So, a year ago, I think we had this world where the Fed had raised rates significantly.
All we heard from a lot of our advisors and investors was, “I can get 5% in cash. Given that there’s all this concern about the economy that makes all the sense in the world.” That was the most that cash was yielding for two decades, right? After 15 years of cash yielding virtually zero. And I think that was such a good—made a lot of sense when to sit on the sidelines.
But by the end of the year, what did we see? That with the economy solid and the growth outlook very positive there’s a huge opportunity to sitting on the sidelines and, you know, we have a lot of cash on the sidelines today. That’s where we start the year. This opportunity set has really changed from where it was a year ago.
