By Brett Freese
Investing requires a level of well-reasoned hope in light of more questions than answers. This challenge has been true of every year and every season of my 35 years of investing. Even before I started investing, I remember all the questions and the fear surrounding the possibility of World War Three where Russia and the US would destroy each other and the entire world with nuclear warheads. It seemed to a young teenager (like me at the time) that it was not if, but when. But here we are in 2024, 40 years since the 1980s and we have newer “will happen” issues to contend with.
I’m not trying to paint an overly optimistic picture of the future. There are really hard questions to answer about debt levels, moral character, US political anger and division, and many geopolitical issues.
However, as the former great mutual fund manager Peter Lynch stated “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” As I stated in last quarter’s review, we should be strategic with what the market gives us, but most importantly stick to the long-term plan.
Economic & Investment Highlights:
Historical Stock Market Declines:
Market declines and inclines rarely look the same or even feel the same, but they do happen and the ups and downs are a part of the process – It is important to have a plan/strategy so emotions don’t dictate buying or selling.
A 5% or greater loss occurs about 3 times a year
A 10% or greater loss occurs about once a year
A 15% or greater loss occurs about once every 2 years
A 20% or greater loss occurs about once every 3.5 years
Please know that when stock prices go down the “market collapse gurus” receive the most air time. Likewise, when stock prices go up all the “bull market gurus” talk about how the market will continue to be up BIG. Please know that most “gurus” are great with hindsight to justify how important it is to have their voice heard.
Market Scorecard for the last 13 weeks ending 03/31/2024:
US Equities:
+ 10.18% S&P 500 (Index of the largest US publicly traded companies)
+ 11.54% Large Cap Growth – Morningstar Category
+ 8.18% Large Cap Value – Morningstar Category
+ 5.36% Russell 2000 Growth (Index of Small-cap growth US publicly traded companies)
+ 0.26% Russell 2000 Value (Index of Small-cap value US publicly traded companies)
International Equities:
+ 6.69% Foreign Large Growth – Morningstar Category
+ 3.97% Foreign Large Value – Morningstar Category
+ 2.51% Foreign Small/Mid Growth – Morningstar Category
+ 3.46% Foreign Small/Mid Value – Morningstar Category
Bonds:
– 1.27% U.S. Aggregate Bond (Index representing intermediate term investment grade bonds in the U.S.)
– 0.44% Corporate Bond – Morningstar Category
+ 0.46% Short Government – Morningstar Category
+ 0.11% Muni National Bond Intermediate Index – Morningstar Category
Other:
+ 7.37% Gold Price
+ 57.73% Bitcoin
+ 1.67% Commodities Broad Basket – Morningstar Category
Current Annual Money Market Rates ending 03/29/2024:
5.17% Schwab Value Money Market
5.02% Schwab Treasury Money Market
Market Indicators:
Inflation:
3.09% as of 03/01/24 (Down 0.15% from 3.24% on 12/1/23
Unemployment:
3.9% as of 03/8/24 (Up 0.2% from 3.7% in December 2023)
Fed Funds Target Rate:
5.25 – 5.50% as of 03/26/24 (Same rate of 5.25 – 5.50% of 12/22/23)
Suggested Next Steps: