Now, at the beginning of 2024, is a good time, to the extent possible, to examine whether a household's investment portfolio, including financial and pension assets, is prepared for expected economic and personal developments.
Here are some variables that can be taken into account: Estimates of global economic growth are 2.8 percent. In the US, estimates are 1.4 percent, and in the eurozone it is 0.5 percent. In Israel, growth is estimated at about 1.6 percent.
It should be remembered that the global economy has undergone shocks in recent years, mainly as a result of the COVID-19 pandemic. Regarding the interest rate that has increased in recent months, both worldwide and in Israel, assessments are that the trend will stop and we may even see declines. However, assessments speak of a relatively moderate decline. In Israel, we have already seen our first decline in a long period of time.
The US inflation rate recently declined to 3.1%. In Israel, estimates speak of an annual rate of just under 3%. Prices of goods and services are also expected to rise due to supply chain disruptions and supply disruptions, as a result of the war. Other variables to take into account are expected changes in exchange rates.
There are still no consolidated assessments regarding the duration of the war, developments in the northern arena, future developments in the political sphere in Israel, immigration to Israel, its scope and internal composition, and more. As a result of these and other variables, there is a possibility of a downgrade in Israel's rating and an increase in the government deficit and tax increases in various areas.
Household preparation for the New Year should include an analysis of the family's investment portfolio, including liquid and pension financial assets, and an examination of whether the level of risk in the current structure and composition is consistent with both family preferences and upcoming planned events, such as retirement or a family event, and those that are not expected, such as damage to family income for various reasons.
The above should not be seen as a substitute for personal investment advice tailored to the needs of each client.
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