Periodic Table of index returns 

Looking across 2023, the following observations can be made from our Table:

• Sixteen of the 17 asset classes generated a positive return last year, compared to only two asset classes in 2022, showing the breadth of the financial market's rally in 2023.
• Leading the positive returns in 2023 was International Equity UH, with a stellar positive return of 23.2%, reflecting investors’ enthusiasm for tech and AI re-lated sources of return.
• International Equity H featured in second place in 2023, with a positive return of 21.7%, as confidence in risky assets increased with the prospect of easing monetary policy in 2024. Results were slightly below UH as the Fed raised rates higher than the RBA in 2023.
• Australian Direct Property declined 7.2% in 2023, which was relatively moderate and represents the impact of valuation lags. However, Australian Direct Property was a winner in 2022 during the downturn, being the only growth asset class to have positive returns.

Investors with a technology and growth orientation, particularly those focusing on US markets, generally outperformed investors focused on domestic and traditional industries. However, the Table serves as a reminder that investment markets are inherently volatile. We can never predict with a high degree of confidence what the future will hold over the short to medium-term.

Therefore, for most individuals, the power of investing may well be harnessed through securing asset class diversification, taking on the risk they can tolerate and adopting a longer-term perspective.

In 2024 central banks are carefully monitoring cyclical and structural inflation elements. On top of that elections are happening in over 60 countries this year, including the US and European Union, involving half the world's population. Potential political regime changes could prove consequential for years to come in an already highly polarised world.

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