There are many reasons investors can be thankful as we approach the end of 2024. Inflation moderating has provided much-needed relief, while strong market returns have reassured those focused on long-term growth. Portfolio diversification remains a cornerstone of smart investing, helping individuals weather market volatility and achieve steady progress toward their financial goals.
This is Brad Barrie, Chief Investment Officer and portfolio manager with Dynamic Wealth Group. Welcome to this market and economic update. In this video, we’ll discuss three major reasons investors can be thankful this holiday season. Although 2024 has seen periods of uncertainty, inflation is moderating, the Fed has begun cutting rates, and the markets have generated strong returns. While there are still things to be concerned about, such as market valuations, the national debt and geopolitical risks, this is a good time to pause and reflect on the many positive factors in the market and economy right now, and to stay focused on the long term with a well balanced, truly diversified portfolio. Over the next few minutes, we’ll cover three important reasons investors can be thankful.
First, stocks have had an impressive run this year, with tech and AI leading the pack, though many other sectors have also seen double digit positive returns. This is the case despite periods of concern from geopolitical tensions, a presidential election, and broader concerns about the trajectory of the economy.
Now, the end of the year is a great time to review your portfolio allocations, and remember, as an old saying goes, diversification means always having to say you’re sorry. Namely, everything in your portfolio should not be up at the same percentages, as I’ve always said, if everything goes up at the same time, it usually means it all can go down at the same time.
As this chart shows, other than the third quarter last year, the market has experienced robust and steady growth over the last two years thanks to strong corporate earnings and growing confidence in the economy. However, the strong market growth has resulted in less attractive valuations, with the price to earnings ratio of the S&P 500 now at 22.3 this is a reminder of the importance of holding a truly diversified portfolio, one that incorporates diversification of not just asset classes, but also of approaches and disciplines. We call this multi dimensional asset allocation.
Next this chart shows the consumer price index, a commonly cited measure of inflation. CPI, tracks the prices of specific goods and services to track general price changes for consumers, it shows that inflation, or the rate at which prices are increasing, has slowed to more normal levels. This is good news, since it all allows the Fed to reduce interest rates, which they have done twice now. However, it’s important to note that falling inflation is not the same thing as falling prices. It’s likely that the prices of everyday necessities will remain high.
While investors have been concerned about the exact timing and pace of Fed rate cuts, what matters more is the overall trajectory. Lower inflation and interest rates helps individual consumers and businesses, and can help support the economy and market.
Finally, this chart shows job creation re-indexed to zero in the year 2000. Many fear that the Fed would cause a hard landing when it raised interest rates, since doing so tends to have a dampening effect on job creation. However, hiring has remained remarkably resilient over the past few years, with new jobs more than making up for losses during the pandemic. While recent reports have not been quite as strong, unemployment is still low at just 4.1% meanwhile, the US economy continues to grow with consumer spending providing a big boost.
While it’s impossible to fully predict or avoid inevitable market volatility, investors should look at the many positives we have near the end of 2024. This is a good reminder of one of our key philosophies around investing that is preparing for the future over attempting to predict the future usually leads to better and more enjoyable outcomes.
There’s much to be thankful for now. We hope you found these high level insights helpful. If you are a financial advisor and would like more information on our multi dimensional approach towards Asset Management. Feel free to download our eye opening white paper titled “Busting Seven Risk and Return Myths.” You can click on the link below, or visit our website at DynamicWG.com or emailing us at info@DynamicWG.com. If you are an individual investor, we are happy to address any questions you may have and put you in touch with a qualified advisor, if so desired.
Until next time, take care everyone and make smart, logical and fact based financial decisions.
Disclaimer:
Clearnomics and Dynamic Wealth Group, LLC are not affiliated entities. No part of this should be taken as investment advice. Consult your financial advisor for specific investment recommendations tailored to your specific situation.
Dynamic Wealth Group (“Dynamic”) is an SEC registered investment adviser. SEC registration does not constitute an endorsement of Dynamic by the SEC, nor does it indicate that Dynamic has attained a particular level of skill or ability. This material prepared by Dynamic is for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Opinions expressed by Dynamic are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Facts presented have been obtained from sources believed to be reliable. Dynamic, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.
Dynamic does not provide tax or legal advice, and nothing contained in these materials should be taken as tax or legal advice.
Any reference to an index is included for illustrative purposes only, as an index is not a security in which an investment can be made. Indices are unmanaged vehicles that serve as market indicators and do not account for the deduction of management fees and/or transaction costs generally associated with investable products. Past performance is no guarantee of future results. Actual returns may be lower.
< Commentary
Three Reasons Investors Can Be Thankful
There are many reasons investors can be thankful as we approach the end of 2024. Inflation moderating has provided much-needed relief, while strong market returns have reassured those focused on long-term growth. Portfolio diversification remains a cornerstone of smart investing, helping individuals weather market volatility and achieve steady progress toward their financial goals.
This is Brad Barrie, Chief Investment Officer and portfolio manager with Dynamic Wealth Group. Welcome to this market and economic update. In this video, we’ll discuss three major reasons investors can be thankful this holiday season. Although 2024 has seen periods of uncertainty, inflation is moderating, the Fed has begun cutting rates, and the markets have generated strong returns. While there are still things to be concerned about, such as market valuations, the national debt and geopolitical risks, this is a good time to pause and reflect on the many positive factors in the market and economy right now, and to stay focused on the long term with a well balanced, truly diversified portfolio. Over the next few minutes, we’ll cover three important reasons investors can be thankful.
First, stocks have had an impressive run this year, with tech and AI leading the pack, though many other sectors have also seen double digit positive returns. This is the case despite periods of concern from geopolitical tensions, a presidential election, and broader concerns about the trajectory of the economy.
Now, the end of the year is a great time to review your portfolio allocations, and remember, as an old saying goes, diversification means always having to say you’re sorry. Namely, everything in your portfolio should not be up at the same percentages, as I’ve always said, if everything goes up at the same time, it usually means it all can go down at the same time.
As this chart shows, other than the third quarter last year, the market has experienced robust and steady growth over the last two years thanks to strong corporate earnings and growing confidence in the economy. However, the strong market growth has resulted in less attractive valuations, with the price to earnings ratio of the S&P 500 now at 22.3 this is a reminder of the importance of holding a truly diversified portfolio, one that incorporates diversification of not just asset classes, but also of approaches and disciplines. We call this multi dimensional asset allocation.
Next this chart shows the consumer price index, a commonly cited measure of inflation. CPI, tracks the prices of specific goods and services to track general price changes for consumers, it shows that inflation, or the rate at which prices are increasing, has slowed to more normal levels. This is good news, since it all allows the Fed to reduce interest rates, which they have done twice now. However, it’s important to note that falling inflation is not the same thing as falling prices. It’s likely that the prices of everyday necessities will remain high.
While investors have been concerned about the exact timing and pace of Fed rate cuts, what matters more is the overall trajectory. Lower inflation and interest rates helps individual consumers and businesses, and can help support the economy and market.
Finally, this chart shows job creation re-indexed to zero in the year 2000. Many fear that the Fed would cause a hard landing when it raised interest rates, since doing so tends to have a dampening effect on job creation. However, hiring has remained remarkably resilient over the past few years, with new jobs more than making up for losses during the pandemic. While recent reports have not been quite as strong, unemployment is still low at just 4.1% meanwhile, the US economy continues to grow with consumer spending providing a big boost.
While it’s impossible to fully predict or avoid inevitable market volatility, investors should look at the many positives we have near the end of 2024. This is a good reminder of one of our key philosophies around investing that is preparing for the future over attempting to predict the future usually leads to better and more enjoyable outcomes.
There’s much to be thankful for now. We hope you found these high level insights helpful. If you are a financial advisor and would like more information on our multi dimensional approach towards Asset Management. Feel free to download our eye opening white paper titled “Busting Seven Risk and Return Myths.” You can click on the link below, or visit our website at DynamicWG.com or emailing us at info@DynamicWG.com. If you are an individual investor, we are happy to address any questions you may have and put you in touch with a qualified advisor, if so desired.
Until next time, take care everyone and make smart, logical and fact based financial decisions.
Disclaimer: