2024 YEAR IN REVIEW
Congratulations to you all on the growth of your portfolios! Here is to hoping for a positive new year and continued success.
Reflecting back a year and a half, I redesigned many of our portfolios based on my expectation that the end of our bear market would bring a positive turn. My analysis indicated that if the market moved upward, it would move broadly and move the market as a whole.
I felt strongly that AI development would drive technology, so we placed positions that complemented the main market. I am pleased to report it was the correct timing and asset design, delivering a good upside for the stock portions of your account.
On the income side our placements performed extremely well again this year. Due to concerns with inflation, I kept our bond portfolios with floating rate issues, successfully paying from five plus percent to upwards of 6 ½ percent monthly. These interest rate items are still available if you want to implement any of them into your current portfolio plans or if your balances are too high in your savings or checking accounts.
CURRENT THEMES
- Companies, business owners, and consumers cheered because Fed rate cuts typically lower borrowing costs. As a result, rates on business loans, home equity loans, auto loans, and credit cards tend to move lower.
- Stock investors were enthusiastic because lower borrowing costs can reduce companies’ expenses and increase profits, which can lift stock prices higher. Since the stock market moves in anticipation of future events, rate cut expectations are something that is watched closely.
- Prospective homebuyers were optimistic. Fixed mortgage rates are linked to the yield of the 10-year U.S. Treasury note, and they hoped it might also move lower.
LOOKING FORWARD
As we head into a new year, I will be watching several themes develop. One will be the tariff issue that is being floated by the new administration. It remains to be seen what the actual rates end up being and what impact they may have on industries. It may be a negotiating tactic to try to drive a better trade deal with a lot of countries.so we will have to see which way this evolves.
Another area is the development of AI. This continues to evolve and grow, and I do believe it’s making a significant difference in technology firms. Over time there will be many developments that will come out of this technology, and it should be a very strong growth area for at least a while going forward. All our portfolios will have access to this area via investments in stocks, ETFs, or mutual funds.
Focus – Think About It
IMPORTANT REMINDER: We have an income fund that adjusts its rate on a regular basis that can keep you ahead of inflation and is paying 6.75% on a monthly basis. This would be tax-free in your IRA accounts. Let me know if you have an interest in a possible placement.