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What should we expect from the market in 2024? This question is asked every year between December and January, when experts from all major companies (JP Morgan, Black Rock, Fidelity, etc.) ask themselves what the next 12 months will hold. It consumes a huge amount of bandwidth from the investment community because it tries to predict what will happen.
These are some of the actual predictions given for 2024.
– “Looking at the broader market, we have more modest expectations.” (Black Rock)
– “My strong hunch, based on market history, is that the bull market will extend in 2024.” (Fidelity)
– Overall, we are cautious about the performance of risk assets and the broader macro outlook for the next 12 months. ” (JP Morgan)
So what’s the big takeaway from these forecasts? Just as we’ve felt at times with this winter’s snowstorm forecasts, even the smartest minds in the industry are basically giving us their best guesses. Recognize that you are giving. In fact, a group of 14 major financial research groups had set their S&P expectations for the end of 2024 in the range of $4,200 up to $5,400 (currently sitting at just over $5,000). This ranges from more than 20% over a 12-month period.
What’s interesting is how many investors and financial advisors use these predictions. They believe in any of these predictions and try to rotate their investments into different sectors of the market and even into different asset classes. Essentially, they are trying to time the market by moving in and out of certain types of assets at the right time.
If you’ve read my columns before, you’ve heard me say that timing the market to increase your profits is virtually impossible (by design). His widely acclaimed DALBAR research on investment behavior and performance found that “fiduciary-oriented wealth advisors can increase investors’ returns by about 3% per year on average, before expenses.” I understand. Most of his 3% increase in revenue came from advisors preventing clients from trying to time the market.
Research has shown time and time again that you have a much better chance of success if you stay in the market longer than by timing the market. So read our articles, check our predictions and find out what’s happening in the world. However, avoid the temptation to constantly change your portfolio to time the market. It’s better to maintain a good, diversified, low-cost portfolio that is resilient over the long term.
However, choose to interpret market predictions, invest wisely, and invest well.
Larry Sidney is an investment advisor principal based in Zephyr Cove. Information can be found at https://palisadeinvestments.com/. Or call 775-299-4600 x702. This is not a solicitation to buy or sell securities. Clients may hold positions mentioned in this article. Past performance does not guarantee future results. Please consult your financial advisor before purchasing any securities.
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