Transformation, renewal and growth: The case for Asian technology in the Year of the Snake
5 minutes reading time
As we step into 2025, it’s worth pausing to reflect on the lessons that 2024 offered investors. It was a year of unexpected rebounds, persistent uncertainty and remarkable innovation. For those who stayed the course, the year highlighted timeless truths: markets often reward patience, diversification and long-term thinking.
So, what can 2024 teach us about preparing for 2025 and beyond? Three key lessons from 2024 stand out.
Lesson 1: Markets look ahead
If 2024 taught us one thing, it’s that markets don’t wait for perfect conditions to rebound.
Time and again, history has shown that market recoveries often begin before economic data reflects improvement – and 2024 was no exception. Despite lingering uncertainty, markets gained ground well before the broader economy showed signs of stabilisation.
Even the best economists can struggle to accurately predict economic conditions. For example, the Reserve Bank of Australia’s (RBA) final Statement on Monetary Policy (SOMP) for 2023 elevated key indicators such as inflation, GDP growth and unemployment for December 2024.
Economic Indicator | RBA Forecast for December 2024 | Most Recent Result |
CPI Inflation | +3.25% YoY | +2.8% YoY (Sep ’24) |
GDP Growth | +2% YoY | +1.4% YoY (Sep ’24) |
Unemployment | 4.25% | 4.0% (Dec ’24) |
Sources: Reserve Bank of Australia, Australian Bureau of Statistics. As at 24 January 2024.
The lesson: Stay invested and focus on the long term. Attempting to time the market or waiting for clear economic signals often means missing out on early-stage recoveries. By maintaining a disciplined approach, investors can better position themselves to capture growth when markets turn upwards.
Lesson 2: Diversification is essential
2024 was a year full of surprises for investors – a race full of unexpected turns, where there wasn’t a clear leader until the latter half. The chart below showcases several critical turning points over the past 12 months.
At the starting gate, four contenders – ATEC S&P/ASX Australian Technology ETF , QFN Australian Financials Sector ETF , A200 Australia 200 ETF , QRE Australian Resources Sector ETF – moved in stride, rising and falling in near unison.
As the race progressed, their fortunes began to diverge. By May, financials, technology and the A200 were gaining ground steadily, while resources looked poised for a comeback – only to stumble and fall behind. By August, financials and technology were neck and neck, battling for the lead. Then, in a late surge, technology sprinted ahead, leaving the others trailing.
The key takeaway? Investors who hedged their bets with diversified portfolios were better positioned to capitalise on sudden shifts, avoiding the pitfalls of backing a single runner and the risks of chasing fleeting performance.
Source: Betashares (performance measures price changes). Performance rebased and measured over 13 December 2023 to 13 December 2024. Past performance is not indicative of future returns.
Lesson 3: Uncertainty brings opportunity
If 2024 proved anything, it’s that uncertainty is often a double-edged sword for investors. From geopolitical tensions to economic shocks, the year was filled with challenges that rattled markets. Yet, for disciplined investors who stayed the course, these moments of volatility presented opportunities to buy quality assets at discounted prices.
Take CrowdStrike, for example – the largest holding in HACK Global Cybersecurity ETF . In July, the company triggered a global IT outage, which has been called “the largest outage in history”3, causing its stock to fall over 36% between 18 July and 2 August.
While this sharp decline might have spooked some investors, those who focused on the long-term growth potential of cybersecurity companies were rewarded. CrowdStrike rallied over 47% in the 12 months to December 11, 2024, approaching its pre-outage highs4.
This resilience in cybersecurity stocks contributed to the strong performance of HACK, which returned over 27% in the 12 months to December 11, 20245. For investors, this highlights the importance of staying disciplined during periods of volatility
The lesson: Uncertainty is inevitable, but it can also create opportunity. By staying disciplined and focusing on long-term goals, investors can turn periods of market volatility into strategic buying opportunities – particularly in sectors with strong underlying growth drivers like cybersecurity.
A roadmap for investing in 2025 and beyond
The lessons of 2024 serve as powerful reminders for investors heading into 2025 and beyond: timing the market is a fool’s errand.
Markets often price in improving conditions long before the data confirms them. While uncertainty can present opportunities to invest at attractive valuations, the key to generating strong long-term returns lies in consistently investing in a well-diversified portfolio of quality assets.
There are risks associated with an investment in each of the Funds. Investment value can go up and down. An investment in any Fund should only be made after considering your particular circumstances, including your tolerance for risk. For more information on the risks and other features of a Fund, please see the relevant Product Disclosure Statement and Target Market Determination, available at www.betashares.com.au.
Sources:
1. RBA’s Statement on Monetary Policy, November 2023. ↑
2. ABS Key Economic Indicators. ↑
3. The Guardian – Slow recovery from IT outage begins as experts warn of future risks. ↑
1 comment on this
Hi, I agree with all your points. We are particularly interested in AI and other developing technologies.
Kind Regards,