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Will Stocks Have A Repeat Performance in 2024?

Updated: May 17

Weekly Recap

  • The Federal Reserve held rates steady but hinted at multiple hikes next year.

  • Inflation moved slightly lower in November

  • Could a bill be introudced to make hedge fund investing in single family homes illegal?

What Happened

As inflation cooled a little, the Federal Reserve hinted at multiple rate cuts last year. The market rallied on the news with the hopes that the Federal Reserve can pull off the impossible, a soft landing. Federal Reserve chair, Jerome Powell, indicated that he may cut rates earlier than expected to get out in front of the economy cooling so that they wouldn't be "too late." And while everyone has been saying a recession is imminent, it still hasn't happened and unemployment is still near historic lows.

Congress is also trying to introduce a bill that would make it illegal for hedge funds and other pooled investor vehicles to invest in single family homes. The bill also stipulates that the current hedge funds will have 10 years to divest their holdings. The bill is unlikely to pass but could be reintroduced after next years election. The bigger problem is the United States isn't building enough homes at the moment.

What Will 2024 Bring?

Will stocks continue their valient performance in 2024? This past year proved to be a much better year than expected but the market and the ecnomy will still have to fight off a possible recession next year. Even though a recession may be inevitable, the severity of it may be mild. So what should investors do?

Sticking to quality is a great idea. Companies that make money, have cash flow, and not a lot of debt are great places to start. Analsyst expectations are high next year for profit growth and if the market misses those targets, it could set up a stumble in stocks. Predicting these results are nearly impossible to do. Look at 2023 as an example. The recession that everyone was expecting never arrived. The best thing you can do is stick to your long term investing plan and goals. Don't try and time the market too much because it always surprises you - both positively and negatively.


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