{"id":13077,"date":"2024-03-27T16:06:00","date_gmt":"2024-03-27T16:06:00","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13077"},"modified":"2024-03-27T16:06:01","modified_gmt":"2024-03-27T16:06:01","slug":"navigating-global-rate-cuts-and-maximizing-investment-potential","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/navigating-global-rate-cuts-and-maximizing-investment-potential\/","title":{"rendered":"Navigating Global Rate Cuts And Maximizing Investment Potential"},"content":{"rendered":"\n

Derrick V. from Los Angeles, CA asks:<\/em> Hello Mitch, Curious if you think global stocks could get some upside support in 2024 as central banks around the world start loosening. Is it a year when investors shouldn\u2019t fight global central banks?<\/p>\n\n\n\n

Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n

Thanks for sending your question, Derrick. 2024 is indeed poised to be a year when central banks around the world shift their policy positions in tandem. If the past two years were all about tightening in the form of raising interest rates, this year may be one where banks opt to either hold rates steady or engage in rate cuts. And that could be good for risk assets.1<\/sup><\/p>\n\n\n\n

The Swiss National Bank kicked things off on March 21, becoming the first developed country to cut rates. To be fair, Switzerland did not experience the same level of inflation that the U.S. and other European countries did \u2013 so the Swiss decision to cut rates was perhaps not as meaningful as if the Fed or European Central Bank had done so.<\/p>\n\n\n\n

Here\u2019s One Simple Step to Help You Improve Your Long-Term Investment Goals<\/a><\/span><\/strong><\/p>\n\n\n\n

The recent Swiss National Bank rate cut signals a possible wider trend, underscoring the importance of proactive financial planning. Understanding your financial situation and building a strong strategy for wealth growth can help you prepare for the future.<\/p>\n\n\n\n

It is for these reasons that I\u2019ve created this special guide, Evaluating Your Net Worth2<\/sup><\/a><\/em><\/span><\/strong>, which may help answer important financial questions like:<\/p>\n\n\n\n

\u2022 How do I correctly calculate my net worth?
\u2022 How does my net worth compare to other households?
\u2022 What strategies can help me grow my net worth over time?
\u2022 What are the risks and factors that can help me grow my net worth?<\/p>\n\n\n\n

If you have $500,000 or more to invest and want to understand how to measure your net worth, download our guide Measuring Your Net Worth.1<\/sup> Simply click on the link below to get your copy today!<\/p>\n\n\n\n

Download Zacks Guide, Measuring Your Net Worth2<\/sup><\/a><\/span><\/strong><\/p>\n\n\n\n

The Federal Reserve and the Bank of England (BOE) both left rates steady at their most recent policy meetings, but policymakers at both banks indicated plans to cut later in 2024. The BOE\u2019s two remaining policymakers who had previously supported more hikes changed their view at the latest meeting, and a narrow majority \u2013 but a majority nevertheless \u2013 of Fed officials reaffirmed projections of three rate cuts in 2024, with longer-term projections showing the benchmark Fed funds rate settling just under 4% by the end of 2025.<\/p>\n\n\n\n

In the emerging markets space, Brazil and Mexico have also been lowering rates, with Brazil cutting rates six times since last August and Mexico making its first cut on the same day as the Swiss National Bank. These banks started their hiking cycles earlier than the developed world, and likely have more runway for cutting as the U.S. and Europe join in.<\/p>\n\n\n\n

Taken together, all signs point to borrowing costs falling broadly across the world throughout 2024, which should support investment and bolster the case for risk assets. Long-time readers of my columns know that I do not subscribe to the \u201cdon\u2019t fight the Fed\u201d mantra, as economic fundamentals and earnings growth matter more to the direction of stocks, in my view. But easing monetary conditions certainly does not hurt, especially in a year when we\u2019re expecting positive growth.<\/p>\n\n\n\n

If we were to assume that the U.S. and foreign countries all enter a sustained path of growth with moderating interest rates and inflation, then there\u2019s a good argument that both domestic and foreign equity markets should benefit. We tend to favor a U.S. bias because growth here is poised to be stronger, but there\u2019s also a good case that international stocks could run nicely as well. The S&P 500 trades at a current P\/E of 20.5x, compared to 13.4x for the MSCI All Country World ex-U.S.<\/p>\n\n\n\n

While we may not know how the market will be affected long-term, a great start is evaluating your financial position to remain prepared. If you do not currently know your net worth, then now may be a great time to calculate it.<\/p>\n\n\n\n

Our free guide, Evaluating Your Net Worth2<\/sup><\/a><\/em><\/span><\/strong>, was designed to help you answer important financial questions, such as:<\/p>\n\n\n\n

\u2022 How do I correctly calculate my net worth?
\u2022 How does my net worth compare to other households?
\u2022 What strategies can help me grow my net worth over time?
\u2022 What are the risks and factors that can help me grow my net worth?<\/p>\n\n\n\n

If you have $500,000 or more to invest and want to understand how to measure your net worth, download our guide Measuring Your Net Worth.3<\/sup> Simply click on the link below to get your copy today!<\/p>\n","protected":false},"excerpt":{"rendered":"

Explore the potential impact of central bank policy changes<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-13077","post","type-post","status-publish","format-standard","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13077","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=13077"}],"version-history":[{"count":2,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13077\/revisions"}],"predecessor-version":[{"id":13079,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13077\/revisions\/13079"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=13077"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=13077"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=13077"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}