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Mazzei Minute: 01/05/24

In spite of all the worries after the 2022 bear market, the stock market performed quite well in 2023, and the bond market recovered some after one of its worst years ever. 

The Standard & Poor’s market index of 500 companies went up 26%. The aggregate index of bonds rallied 5.5%. Gold went up 13%, but oil dropped 11%.

For the next few weeks, we will hear from talking heads about their market targets for this time next year. These predictions always make me cringe—like when a bombastic know-it-all tries to dominate a group discussion. After 35 years in this business, I’ve learned I have no idea what will happen tomorrow.

We do try to be accurate, however, about the major trends in place. The current bull market, which started in October of 2022, hopefully has legs for a longer run. With the Federal Reserve pivoting to reducing interest rates this year, economic growth still looking positive, and corporate profits estimated to increase 11.5%—the tail winds for a positive year are with the stock market.

There is still a chance that the economy could slip into a recession and cause some volatility, but there are some fascinating historical items that indicate the stock market might have another good year. Over 80% of the time that the S&P 500 has gone up over 20%, the very next year has been positive, and for presidential election years, 80% of the time the stock market is positive.

Hopefully, the current uptrends for both stocks and bonds stay positive in 2024. Talk to your financial advisor for the correct investment strategy for you, and have a blessed and prosperous new year!


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