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Millionaires are now better positioned to take on more risk to achieve greater returns on their investments, according to a new analysis.
In its Q2 2024 investment outlook, HSBC Global Private Banking has advised high-net-worth and ultra-high-net-worth individuals that the markets now offer plenty of opportunities to “put cash to work”.
“HSBC Global Private Banking is advising [rich] clients to consider taking on more risk and put their cash to work as the investment environment has become more attractive,” a statement said.
The bank indicates that, among other investment options, focusing on quality stocks and bonds over cheap valuations could offer better rewards.
Bonds and US equities
It recommended locking in attractive bond yields and extending bond duration, as well as broadening US equity exposure.
The outlook noted that the first US Fed rate cut for the year is likely to happen in June and that it expects the US equity rally to broaden beyond technology stocks to companies in additional sectors.
And since volatility is expected, HSBC also recommends alternatives and multi-asset strategies.
Other options
Within the Gulf Cooperation Council (GCC) region, investors will still see opportunities for great returns, given that the non-oil sectors continue to benefit from structural reforms, favourable demographics and ambitious infrastructure programmes.
In Asia, a great strategy is to diversify and consider other markets like India, Indonesia, South Korea and Japan, while China is yet to announce its stimulus measures.
“We think our investment priorities find the right balance between exploiting the opportunities while focusing on quality and limiting exposure to areas where risks are mispriced,” said Willem Sels, Global Chief Investment Officer at HSBC Global Private Banking and Wealth.
(Writing by Cleofe Maceda; editing by Seban Scaria)
