Investment Corner: Predictions for 2024 | Tahoe Daily Tribune.com

With 2024 just around the corner, it’s no surprise that investors are thinking about the new year. More specifically, people want to know which investments will lead to a successful and profitable year for him in 2024. But whose opinion should we listen to?

There is an entire industry of investment and economic forecasters whose only job is to predict which direction things will go. Investors often seek guidance from these experts and analysts who claim to have insight into the future in hopes of gaining an edge on their investment strategies. But if there’s one thing we can learn from 2023, it’s that we continued to see serious results in which professional predictions failed and were contradicted.

One thing that didn’t happen this year is the most predicted recession in history. Most economists and forecasters expected the U.S. economy to fall into recession by the end of the year. Instead, real gross domestic product (GDP) recorded a significant increase of 4.9% over three years.^rd The Bureau of Economic Analysis said sales fell this quarter after a slight increase in the first and second quarters.

There were other notable mistakes:

• Because the Fed raised interest rates (and mortgage rates followed suit), the large drop in home prices that many experts predicted never occurred.
• Throughout the year, oil price and energy forecasts were all pointing in one direction: up. Whether it was OPEC production cuts, the Russia/Ukraine war, the Israel/Palestinian war, or a million other reasons, everyone expected oil prices to rise. Instead, as of Christmas, oil prices had fallen nearly 5% year-to-date. Natural gas prices have fallen nearly 40% year-to-date, despite household utility bills.
• Dividend stocks, touted by many in the financial industry as a good strategy for the uncertainty of 2023, have lagged far behind the broader market.

Perhaps the most obvious miss for 2023 was the stock market prediction. January 8th^th, The Motley Fool declared, “We’ll still be in a bear market through the end of the year.” This feeling was not uncommon. Even bulls were predicting single-digit market gains in 2023. Instead, as of Christmas, the Nasdaq was up 44% year-to-date, while the S&P 500 was up 24% year-to-date. Unfortunately, if you don’t listen to the experts and choose to keep your money outside the market, you’ll be missing out on big profits.

The big takeaway from all this? There are plenty of highly paid experts whose job it is to make predictions and grab headlines, but their best guesses are just that: guesses. If you focus too much on the news headlines, you’ll be missing out on the most important part of investing: guaranteed long-term returns.

As mentioned previously, the S&P 500, a basket of large American company stocks, has historically risen 62% month over month. After one year, you could potentially get a 79% return, and after 10 years, it’s 94% (all based on past performance). Understand your goals, know how much risk you can tolerate, and diversify your investments by focusing on long-term investments.

So what about the critics? Take these headlines with a grain of salt. Please read with the understanding that the 2024 predictions are mere speculation and should not be fooled into dismantling a well-invested and diversified portfolio.

In all cases, plan your actions, 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.