A Wealth of Common Sense: The Biggest Risk in 2024
What a difference a few months can make! At the end of the autumn, investors were fearful due to rising interest rates and falling stock prices. That trend has reversed in the final months of 2024. That particular risk appears muted today.
Going into the new year, investors should start by thinking about risks. In particular, think about potential risks that nobody will see coming in 2024.
Investors can never truly prepare for the unexpected. 2020’s pandemic outbreak wasn’t on any investor’s radar the year or even six months before the world tried shutting down the economy.
Such outside events can and do happen with some regularity. Their damage varies. However, in time, markets will recover. But those who are too bullish going into such a shock are in for a rude awakening.
That could be the case with many investors today. Markets have shifted from extreme fear to extreme greed. While many issues weighing on markets such as inflation have lessened, other risks exist.
That’s why it’s prudent for investors to stay diversified. And be willing to take profits on trades as they occur. Holding some cash and cash-generating investments will also prove handy to reduce the impact of unexpected events.
When we look back on 2024 in 12 months, we will likely think the most about unknown events that impacted stocks the most.