We’ve successfully navigated through another year, and once again, the stock market has defied the expectations of most major institutions. At the outset of the year, prominent firms were forecasting a market return ranging from -5% to +10%. However, as highlighted by Ed Butowsky in this video, the S&P exceeded expectations by achieving a remarkable 25% return.
Predicting market trends involves considering numerous factors, and the dynamic nature of the market, coupled with unforeseen events, adds complexity to this equation. In today’s video, Ed delves into the contrast between the Dow Jones (DJIA) and the S&P 500 (using SPY). Thanks to the Magnificent 7, the S&P has significantly outperformed the DJIA this year, although the Dow also saw a positive increase of over 10%. For further insights, be sure to watch the video!
Summary:
- The S&P 500 has gained close to 25% this year, outpacing the DOW, which stands at around 13%. That’s nearly a 100% difference!
- Economic indicators, such as job reports, GDP, company profits, inflation, and interest rates, are typically predictive within a 6-9 month timeframe ahead of our current position, providing insight into market trends.
- Smaller cap stocks present a promising opportunity for investors looking for growth. With lower interest rates, inflation, and increased consumer spending, these companies may see improved cash flow in 2024. As always – these are not recommendations and one must consider their own risk/reward goals as well as personal timeline and constraints.
This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Past performance does not guarantee future results.