Lastly, we wanted to break out of our US-centric focus to discuss some other key countries' performance. The reason for this is twofold:

• It may be very difficult for the US to repeat its 2023 performance.

• Other countries could do well, even if the US economic growth picture darkens.

For these reasons and others we cover below, we turn to India. Always one of the world's most important countries, the world's largest democracy gets very short shrift economically-speaking in the West. And one of the only aspects of the country that gets less attention than its economy might be its stock market.

Despite that fact, perhaps, India has had a very quiet but also very strong post-pandemic stretch.

• ​It has been the world's fastest growing major economy not only in 2023 but also 2022.​

• ​It is the world's most populous country but also one with a large percentage of its population that are young and working age.

• Its middle class is growing strongly and therefore the country can grow domestically via consumption of its richer citizens.

• Its stock market is doing great! The Mumbai exchange has just recently surpassed Hong Kong's to become the world's 7th largest stock market.

So, India is clearly doing well and expectations are high that it will do far better in the years ahead. One of the key reasons is the diversifying of global supply chains. With many major multinational looking to have a "China+1" strategy of managing their supply chain or manufacturing base, it is very likely that many of these firms will choose India.

That would provide large numbers of manufacturing jobs that India desperately needs to secure its place as a middle income country.

The country should hopefully experience greater urbanization and industrialization and both themes should mean that India will continue to grow strongly. Better days are ahead - for the economy, for the stock market and, most importantly, for its citizens!

Furthermore, however, the country is reaching an interesting inflection point politically as well.

Like so many other democracies, the country has an important general election in 2024 and there is lots of concern that if the incumbent Narendra Modi wins it will mean two themes continue to gather strength:

1. India will continue in an illiberal direction.

2. This fact will endanger the growth story we have outlined above.

Is this true? How should you think about this situation?

Well, the challenging aspect is that Modi will almost certainly win and, as a result, his BJP party will continue its illiberal approach to governing. Alongside its many successes, the party has been a frequent opponent of India's independent institutions and also presented real challenges to the country's social fabric and multi-faith democracy.

Like other democratic leaders, in the West and the Global South. Whenever it comes to a fork in the road: Modi's government seems to prioritize its own power over India's democratic health and pluralism.

But, sadly for some, this won't necessarily damage the growth story we outlined above.

Far from it, in fact, while India may becoming more illiberal it may also be becoming better governed.

The same Modi government that rides roughshod over India's institutions and laws also makes it far easier for politically connected companies to cut through red tape and make investments.

That unpleasant truth lies at the heart of why Modi and the BJP will be so likely to win power once again.

This is a tough reality to accept where we think that good governance and a pluralist and open approach to democracy will always lead to better economic performance but the evidence for this is, at best, very mixed.

And that is over the long haul. Over the short term the correlation between growth and democracy is often inverted and can remain that way for some time.

That doesn't mean there are not dark clouds in India's sunny skies. The country has major governance problems with many of its largest and most profitable firms controlled by extremely opaque family groups. There are legitimate questions also about whether some of Modi's policies - around restricting agriculture exports or imports for instance, will serve its growth story.

Further, valuations of Indian equity - the price of company stock prices compared to their earnings - are already very high. Indian stock index is, in aggregate, already around 20 times its expected earnings price.

Lastly, there is the very terrible rise in religious tensions that often creates real damage in terms of brutal attacks of violence. This potential for real strife alongside the always bareknuckled Indian approach to elections is also a very high probability.

The election will look very "messy" and quite a bit worse for many Indian citizens on the ground.

But that unpleasant experience could also provide a buying opportunity for Indian equities in the months ahead. Election-related violence and evidence of further demographic backsliding may damage the interest of foreigners in buying Indian equities this spring.

This could make them cheaper for those looking to diversify away from their US investments that have, of course, done very well this past year and are a) also richly valued and b) facing their own election headwinds.

It is quite a thought to realize that, of the two contests, a neutral investor might feel far more certain in India's election - and Indian democratic process? - than the US?

A controversial and contrarian thought to start your 2024.

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