EXCLUSIVE: 2024's Tipping Point — The Widening Gap In Market Power

In a world where the economic divide is deepening, Will McDonough, chairman and founder of Corestone Capital, sheds light on the escalating dynamics of market power. In his insightful talk at the Benzinga Road to Wealth in 2024 seminar, McDonough spotlighted how higher interest rates create a chasm between the financially robust and the vulnerable.

Strength in Capitalization

He pointed out the stark reality: “We’re going to see a real dislocation between the haves and the have-nots,” signaling a shift where well-capitalized companies are gaining the upper hand. With their hefty balance sheets, these firms are not just enduring the hike in interest rates, but are also strategically poised to pursue mergers and acquisitions, which could dramatically alter the contours of various industries.

Challenges for Smaller Enterprises

McDonough delved deeper, illustrating the impact on smaller companies: “Those not well capitalized…are going to get debt at 10-15%, a way higher threshold… for driving revenue.” This scenario, he argues, will intensify market consolidation, squeezing out smaller competitors and increasing costs for the general population.

Also Read: Fed’s Goolsbee Expects Interest Rates To Fall With Inflation, Says ‘Golden Path’ Is Possible

Geopolitical Influence on Markets

McDonough emphasized the importance of monitoring geopolitical events, especially in an election year, and how they influence market movements. He advised caution and a strategic approach to investing, suggesting a balanced investment strategy that combines secure yield-producing assets with a focus on market leaders.

Strategic Investment Approaches

McDonough’s message was clear: In 2024, investors must navigate cautiously, understanding the nuances of a rapidly changing financial landscape where the divide between the market’s giants and the smaller players is becoming increasingly pronounced.

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Image: WillMcdonough/CorestoneCapital AdamSmigielski/Unsplash