FSCS - A Long-Term Perspective For The Road Ahead: Insights From Our Q4 2024 Economic And Market Review

2025-01-29 06:30:00 ET

Summary

• Geopolitical tensions and an uncertain inflation outlook rattled markets in the fourth quarter but U.S. stocks still managed to move higher.
• While other equities lagged and bonds remained flat, investors who held a balanced portfolio once again did well.
• As a new year and a new U.S. administration begins, it’s a good time to review client portfolios and prepare to navigate the road ahead.
• Global diversification will become even more important as U.S. large cap valuations and dominance increase.

You've likely heard the saying, "when the going gets tough, the tough get going." A similar principle can apply to investing: "when the going gets tough, stay in the market."

It's not a stretch to say that the going was pretty tough in the fourth quarter of 2024. Financial markets were volatile, and for good reason. There was a U.S. presidential election, won by Republican candidate Donald Trump, followed by U.S. policy uncertainty . There was the brief but worrisome threat of a government shutdown. The U.S. Federal Reserve cut rates as expected but then said it will be more cautious about further reductions, rattling the markets....

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