2024 Investment Market Analysis
After a positive run for the markets in 2023, investors have turned their focus to 2024. All manner of economists, strategists, pundits and members of the financial media are weighing in confidently with their respective predictions for the economy and markets, predictions that vary so widely as to remind me of the old Borscht Belt joke about the opinionated family member at the Thanksgiving table: “Frequently wrong, never in doubt.”
Regular readers of this letter know that at MJB Asset Management we do not spend an inordinate amount of time predicting the unknown; in our view, the path to meeting long-term investment goals lies in identifying and maximizing present investment opportunities and adjusting portfolios along the way as conditions and opportunities change. We do this by employing a series of technical and quantitative indicators to analyze current market dynamics, which enables us to make informed decisions about:
- where the strongest risk/reward opportunities currently lie and
- the timing of when to make changes by buying and/or selling.
At present, our 2024 investment market analysis indicates that large cap U.S. stocks offer the strongest risk/reward ratio in the equity markets. As such, for our clients with growth-oriented portfolios, we are maintaining our positions in equities. For clients with more moderate, balanced accounts that have positions in the bond market, we are taking advantage of the risk-free 5% short-term rates currently available in the U.S. Treasuries to build 6- to 9-month Treasury ladders; we will continue to do so until the interest rate landscape changes in a material way. For income-oriented accounts, we continue to hold positions in a diversified mix of bond funds, preferred stocks, Master Limited Partnerships, utilities and high dividend paying stock funds.
From a macro standpoint, the U.S. economy is continuing to grow, though at a slower pace; inflation is slowly cooling off, though it remains above desired levels; and interest rates appear to have stabilized, though not yet declined significantly. All of those fundamental factors are positive for equity markets. On the fixed income side, many pundits are predicting that the Federal Reserve will lower rates this year, yet Fed Chair Jerome Powell and several regional Fed presidents have only hinted at cuts; none have yet been announced. Nevertheless, those hints, combined with the above-mentioned economic growth and moderating inflation, are bolstering investor sentiment, which in turn is bolstering the stock and bond markets. For how long, we do not predict; however, whenever the investing environment changes, we will be ready to adjust portfolios accordingly.
In addition to the start of the calendar year, this week also marked the first new moon of 2024. From the ancient mystics to the present day, traditions for new moons revolve around setting intentions. Though lunar cycles are not part of our investment process, I strongly believe in setting intentions, and at MJB Asset Management, we have always set our intention to serve our clients as if they are our own family members — opinions always welcome!
Please give me a call or send me an email if you have any questions about our 2024 investment market analysis or other aspects of your portfolios. I always look forward to hearing from you and am always happy to talk with you. Thank you for your support and for investing with MJB Asset Management.
Disclosure: Financial instruments discussed here may not be suitable for all investors. Before investing in any investment portfolio, Client and Financial Advisor should carefully consider the client’s investment objectives, time horizon, risk tolerance, and fees. The opinions expressed here are as of the date reflected and are subject to change. Diversification may not protect against market risk. There are risks involved in investing, including possible loss of principal. Past performance does not guarantee future results.