“I get paid to be suspicious when I don’t have anything to be suspicious about.”
That, in a nutshell, is a decent definition of what a good money manager does for his clients – be suspicious about the current environment and wonder if change is afoot.
As everybody probably knows by now, U.S. equity markets did very well in 2023 with the S&P 500 Index (“S&P 500”) up 26.29%. Most people also know the gains mostly came from several mega-cap tech/communications services companies, dubbed the “Magnificent Seven,” they accounted for about 62.20% of last year’s gains according to S&P Global while the remaining S&P “493” gained 9.94%.
It is wise to remember the “Seven,” generally had a bad year in 2022. It also helps to remember what investors thought of markets a year ago – that we were facing a recession, and probably a banking crisis, and we had little clue as to whether interest rates would stop rising.
But we also are facing a different set of assumptions about the year ahead. We seemed to have dodged an imminent recession, the banking crisis didn’t spread beyond a few banks, and interest rates seem poised to plateau and fall. There remain a host of things to worry about as we enter the new year. Read our full market commentary to see our list of things of concern in the new year.
Our January 2024 Market Commentary and review provided by provided by Peter W. Tuz, CFA, CFP®, President & Director, Portfolio Manager, Chase Investment Counsel.