What Happens In 2024?
🚀 What’s happening: We all remember the predictions of those that got things right when everyone else was wrong.
Whether it was the few who predicted the U.S. Olympic Hockey Team would beat the Russians in 1980, those who predicted the housing collapse in 2008, or the people warning of covid in 2019, being right when the crowd is wrong stands out.
But the truth that no one talks about is: the crowd is usually right.
The reason for this, at least in our view, is that most people tend to extrapolate what is going on now to what will happen in the future. And most of the time, this line of thinking tends to be right (unless of course we get a once in a 100 year pandemic).
So now that you know that, you know to take our money predictions for 2024 (or anyone else’s) with a grain of salt.
The Fed won’t cut rates until June 2024.
This one is both positive and negative, but slightly against the crowd (the market is currently pricing in a +60% chance of the first cut being in March). It’s positive because it means inflation will continue to come down and the economy will hold in ok for the first half of the year, but negative because once the Fed does start cutting, it tends to be a real sign that economic growth is struggling.
Most investors right now are simply cheering the lower inflation numbers and paying less attention to slower company growth. Companies should be able to cut costs for the 1H of the year to maintain profitability and give the Fed a reason to hold off, but once we get to the 2H of 2024, there won’t be anything left to cut and so the Fed will have to come to the rescue.
We do have one caveat to this prediction: the Fed sounded much more open to rates cuts that we would have thought at their meeting last week. A part of us does wonder whether this is because they are already seeing something in the global economy that worries them (that we aren’t).
2024 will be a good year for stocks, but they won’t go up in a straight line (so be patient).
The VIX Index, as talked to above (explained in more detail here), is unusually calm right now amid lots of global uncertainty. We see this changing in 2024 as geopolitical events continue to unfold and we get closer to the U.S. election.
During an election year there tends to be more volatility as different types of stocks will react depending on who the market thinks will win the election at any given moment. For example, if the market thinks a Democrat will win, we would expect companies tied to electric vehicles to do well. If the market thinks a Republican will win, we would expect oil & gas companies to do better.
On the whole though, we predict a solid year for stocks and the S&P 500 to hit 5,000 by August or September if not sooner (which would be about 6% upside from here). For the record election years tend to be positive with and average return of 4% so we aren’t really going out on a limb with this one based on history.
Creative earning opportunities will continue to expand (so keep looking).
A recent survey found that 64 million people did freelance work in 2023 (a record high). More and more people are looking to earn extra money or escape their 9 to 5— and we think this trend will only increase in 2024.
If you are looking for a way to earn more, the key is finding something that you can do consistently (here is a quick guide to help).
We will be focusing more on tips to help you earn more in 2024 to align with this view as we plan to make our newsletter shorter and expand it to multiple days a week, so stay tuned.
👪 Closer to home: Whatever comes in 2024, we are going to try to be here to help you understand it all and position you and your family for success.
