Wisdom for 2024
As we begin another year, clients often ask us what our “crystal ball” tells us about the upcoming year. We often joke that our batteries failed many years ago and that we can’t seem to find replacements for them. It can feel frustrating to lack control of the stock market, economy, and health. While the future of the stock market and the economy is unknown, we look forward with anticipation to 2024. Keep in mind that God has planned every detail of the next 12 months. He knows the highs and lows of your life, health, budget, and family.
Psalm 119:105 gives us a great reminder of the attitude and actions that we need to have when facing the future: “Your word is a lamp to my feet and a light to my path.” Our attitude should be one of trusting God and looking to His word for help and guidance. It provides light for our feet to safely navigate the uncertainty. Because our attitude is one of trusting God, our actions should focus on moving forward confidently into the future. God, through His word, will guide and direct our path.
As your advisors, we are honored to walk with you through this year and share the wisdom and guidance that God has provided us. Please pray for us, that we would be sensitive to God’s leading and immersed in God’s word, allowing us to be of the most help to you this year.
Review of 2023
For a variety of reasons, last year was a fascinating year. First, the much-anticipated recession hasn’t happened yet. Who knows, maybe it won’t happen. It’s not our job to predict recessions, but it is our job to walk with you through the ups and downs of the economy and the markets. 
Second, the year can be divided into two parts, the first 9 months and the last 3 months. In the first part, the vast majority of companies (stocks) experienced muted returns while only a handful of the largest companies (sometimes called the “Magnificent 7”) saw substantial growth. It’s not common for the markets to move so much based on only the growth of so few companies. This caused the Advisory Team at The Life Group some concern about what this could mean for the overall health of the market. Then in the last quarter, we saw just about all companies (stocks) begin to grow and experience some recovery from the 2022 declines. At the end of the year, the stock market was up nicely from where we began 2023. Still, it was a bit of an unusual year overall, as the “Magnificent 7” were up 71% while the other 493 stocks in the S&P 500 were up an average of just 6%.
Finally, inflation has started to slow, allowing the Fed to pause raising interest rates. This caused a nice rally in the bond market towards the end of the year. Should the Fed start to lower interest rates in the next few months (as is widely expected), it should lead to further recovery in bonds.
Thoughts on 2024
Bonds
As we think about 2024, keep in mind that all investing involves the risk of loss. That being said, we expect this year to be good for bonds. Lower interest rates make older bonds look more attractive. Those in our Biblically Responsible Investment models have already been positioned to take advantage of a potential recovery.
Stocks
Stocks are somewhat less clear. We do not expect either another significant rally or a prolonged sharp drop. In reality, the stock market will be influenced by many factors, such as inflation, interest rates, the presidential election, and global uncertainty. In other words, it’s shaping up to be a normal year of uncertainty. This may be a good point to pause and re-read the section on Wisdom for 2024.
Election Year
We mentioned the election, which always seems to spark fear of the “other” party winning, and what that might mean to the markets and economy. There are several things that you need to know/remember over the next 10 months.
- Turn off the news! Please, please just stop listening to the 24-hour news cycle. You will be so happy that you did. That means, no Fox News, CNN, MSNBC, or other outlets. This also applies to other radio shows, YouTube channels, or social media influencers. 2024 is a good year for a politics fast. Don’t take this the wrong way. We want you to have opinions, and we want you to vote! We just don’t want you to be carried away by fear and anxiety, or for the various media pundits to determine your investment decisions.
- Election years are typically good for the stock market. In the included charts put together by economist Mark Peterson, you can see that since 1926, election years have averaged a return of 11.6%. We also see that the first half of election years tends to be sluggish while the second half sees much of the change in values.
- Politicians get too much credit for a good economy and too much blame for a bad economy. Don’t believe the campaign promises to increase GDC or lower unemployment. It’s just the politician blowing smoke.
Finally, we encourage our clients to remain committed to their long-term plans. Don’t allow the noise of news or short-term market movements to distract you from what matters. Talk to your advisor when you face fears and uncertainty. Remember that volatility is a normal part of investing. Pause for a moment and consider the following chart. While about 75% of the time the stock market experiences a positive year, each year the market is down at some point. This is normal and to be expected.
Concluding Thoughts
As we wrap up this letter, there are a few items we would ask you to keep in mind:
- The Stewardology Podcast: Did you know that we have over 170 episodes on all kinds of Christian Living, Stewardship, Theology, and Financial topics? When you listen to this podcast, you will be better informed on how Life Group thinks about all kinds of issues and challenges facing stewards just like you. It’s our prayer that this podcast will play a small part in you becoming an even better steward of all your assets. Listen today at https://stewardologypodcast.com/
- Please be sure to send us a copy of your Federal Tax Return: Once your tax return is completed, please have a copy sent to us so that we can assist you in managing your investments and taxes from year to year.
- Send us a copy of your 401(k) or employer-sponsored retirement plan statement: For those of you who still have your retirement funds with your employer, sending us a copy of your year-end statement is a great way to make sure that we are helping to manage your retirement assets correctly. You may need to choose other or better investments within your 401(k). We will help you with making these decisions based on our experience and research.
- Are your Will and Power of Attorney documents up to date? If you would like a review of your documents, please reach out to your advisor. When you do, check to make sure that we have the most recent copy of these documents in our files.
- Retain $10,000 to $20,000 cash on hand to avoid credit card debt. Use high-interest savings accounts like www.Ally.com or www.CapitalOne360.com. These savings bank accounts are linked to your local bank or credit union account.
- Thank you for the many fine referrals you have sent us over the years. We are honored for your trust and continued confidence.
Psalm 20:7 – “Some trust in chariots and some in horses, but we trust in the name of the LORD our God.”
Sincerely,
Tim Russell, Roy Russell,
Jeremy Ehst, Mark Magruder, Angel Sotomayor, Stephen Virkler
Wealth Managers
Securities & Advisory Services offered through Geneos Wealth Management. Member FINRA/SIPC
