January 31, 2024

As we head into the New Year, we ask our clients to align their resolutions with their financial goals. Meanwhile our analysts have been doing the same—aligning economic and market insights with portfolio strategies. Let’s review what’s on their minds.❄️🍾

Santa Pause Rally: The recent “Santa Pause” rally, triggered by the Federal Reserve’s pause in rate hikes, brought an unexpected surge in both stock and bond markets. This short-lived growth cycle was a pleasant surprise. However, with early signs of a pullback, our team emphasizes the importance of staying diversified to navigate the evolving market landscape.

Impressive Stock Market Performance: 2023 was a year to remember for the stock market, boasting an average annual return of 26.29% for the S&P 500. This remarkable performance significantly outpaces the long-term average, and highlights the benefits of a balanced and diversified investment strategy, especially during variable market conditions.

A Historic Turnaround in Bonds: The bond market ended 2023 on a high note, witnessing one of its best two-month rallies since 1926. This rebound, following a period of decline, serves as a potent reminder of the bond market’s dynamic nature. Often perceived as a conservative investment, bonds showed they could be quite the opposite!

Election Year Dynamics: With 2024 being a presidential election year, historical patterns suggest a slower start for U.S. stocks, usually followed by a more robust second half. While history is not a guaranteed forecast of the future, understanding these trends can help us stay focused on our long-term financial objectives as the world turns.

Navigating Post-Peak Inflation: The period following peak inflation rates is a critical point of analysis. Both stocks and bonds have historically shown mixed performances during these times. Known as the “sweet spot,” this period often sees higher correlations between these asset classes, but investors typically welcome higher correlations if it leads to positive returns.

As we drive on, we want you to remember that our strategies are designed to adapt to both the challenges and opportunities ahead—not the past. Your financial goals are our priority, and we are always here to assist you. Please call or email us if you have any questions. Here’s to a year of prosperity and exciting developments.

Fun Fact – Champagne Supernova: Did you know that around 360 million glasses of champagne are enjoyed on New Year’s Eve in the United States alone? On a global scale, the champagne market is expanding rapidly, projected to grow from 264.10 million liters to 324.10 million by 2029, at a steady growth rate of 4.18% per annum. 🥂🎉