Market Update December 2023: Top month for the Peaks portfolios

In this Market Update, you will find:

• November best month of 2023
• Inflation lower than expected
• Persistence is rewarded

November Best Month Of 2023

After two months of price declines, stock markets showed quite a strong recovery in November. Returns on both stocks and bonds were very positive and all Peaks portfolios achieved high returns: from +4.3% for Cautious to an impressive +6.7% for Adventurous. This made November the best stock market month of 2023 so far, and even one of the best months in recent years. 

Table 1: Net returns of the Peaks portfolios

Good to know: These are the net returns of the Peaks portfolios for the previous month, the year-to-date, and since the start of Peaks, after deducting Peaks’ fees, fund costs, and transaction costs. The value of your investment may fluctuate. Past performance is not indicative of future results.

The table above shows returns for a portfolio of €10,000. The returns do not take into account any deposits or withdrawals made during the month. If you have deposited or withdrawn money this month, your personal return will differ from the figures shown above. Additionally, your personal return will vary if you have invested less or more than €10,000 due to the monthly fixed costs charged by Peaks.

With the rising prices in the portfolios, the volatility (risk) of the Peaks portfolios has declined a bit in the past month. The volatility measures the fluctuations of a portfolio over time. The higher the volatility, the greater the fluctuations and the riskier the investment.

 Table 2: Risk of the four Peaks portfolios

Good to know: Here you can see the risk of the four Peaks portfolios over different time periods (last month, year-to-date, and average since the start of Peaks). Risk represents the annualized fluctuation in return and is also referred to as "volatility.". Risk is measured by calculating the standard deviation of the daily net returns of the Peaks portfolios and converting that number to an annual basis.

Inflation Lower Than Expected

The main news in November was that inflation fell harder than analysts had expected. In Europe, inflation dropped to 2.4% (forecast: 2.7%). In the United States, although inflation is still slightly higher (3.2% on an annual basis), it fell sharply compared to October (when it was 3.7% on an annual basis).

With inflation falling, central banks see less need to raise interest rates further. As a result, analysts expect interest rates to remain at their current levels for the foreseeable future and not rise further. This is good news for stock markets, because rising interest rates slow down economic growth (as it's then more expensive for companies to invest, while it's more attractive for consumers to save). 

Persistence is rewarded

November showed that in investing, perseverance is rewarded. In the past two months, negative returns made it very tempting to exit and sell investments. But November proved that it is wiser to keep the long-term view in mind. Investors who have continued to deposit invested at lower prices in September and October. Now they are reaping the benefits of that! 

All in all, 2023 has been a very good stock market year so far, with returns of +7.8% to +14.7% for the Peaks portfolios.

Table 3: Net yields of the index funds included in the Peaks portfolios

Good to know: These are net yields of the index funds in which you invest with Peaks in November 2023, for the entire year 2023, and since the start of Peaks, after deducting Peaks costs, fund costs, and transaction costs. The value of your investment may fluctuate. Past performance is not indicative of future results.

Investing always involves risks. Know that you could lose (a part of) your invested money.