1st Quarter 2025 Financial Planning Newsletter

Good Year After Good Year

With 2024 in the books, now is a great time to consider how different 2024 turned out, from an investment standpoint, than most pundits expected.  If you can remember all the way back to the beginning of the year, you might recall economists worrying about the risk of a hard landing for the U.S. economy, loosely translated as a recession.  The election year was likely to be turbulent, the Middle East and Ukraine loomed over the global political situation, and 2023 was such a great year for the stock market that it was hard to imagine it being followed by a better one.

Yet here we are, with the S&P 500 up double digits for the second year in a row.  The economy is booming here and abroad, with a 2.8% economic expansion in the U.S. economy heading into the final quarter.  We’re not hearing a lot of recession forecasts.

There may be two lessons in last year’s market boom.  The first is that nobody can accurately predict the markets, which means it’s generally better to tune out all the irrelevant chatter that tends to pick up around the start of a new year.

The second is that bull markets don’t last forever, and they often draw closer to an end when the irrelevant noise you’ve been wisely ignoring starts to reflect overconfidence.  This sense of optimism is evident; nearly 60% of consumers responding to the Conference Board survey expect stocks to be higher over the coming years.  This marks the highest percentage ever recorded since the survey’s inception in 1987. 

We don’t know what’s coming, but it’s always better to have your seat belt buckled, especially when others seem to be expecting the roller coaster to keep rising forever.

Click here to read more articles: From Our FSA Family, Smart Healthcare Shopping, the Crisis on Top of the Crisis, the REAL Risk to Your Financial Future, Taxes: What Can We Expect, Tales of Fraud

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