January 2024
401(k) Allocation

401K Allocation

By: Jake Eggett

No trades.

What a difference a year makes.

At this time last year, the S&P 500 had just logged its worst annual performance since the financial crisis, the Fed was in the midst of the most aggressive rate hike campaign in decades, inflation was above 6% and concerns about an imminent recession were pervasive across Wall Street.

Now, as we begin 2024, the market outlook couldn’t be much more positive. The Fed seems to be done with rate hikes and has indicated that cuts are on the way. Economic growth has proven more resilient than most could have expected, and fears of a recession are all but dead. Inflation dropped substantially in 2023 and is not far from the Fed’s target while corporate earnings growth is expected to resume in the coming year.

Undoubtedly, that’s a more positive environment for investors compared to the start of 2023, but just like overly pessimistic forecasts for 2023 proved incorrect, as we look ahead to 2024, we must guard against complacency because at current levels both stocks and bonds have priced in a lot of positives in the new year. Some of those expectations could prove to be incorrect and if so, that could create some additional volatility.

As such, while we are prepared for the positive outcome currently expected by investors, we are also focused on managing both risks and return potential because the past several years demonstrated that a well-planned, long-term focused and diversified financial plan can withstand virtually any market surprise and related bout of volatility, including multi-decade highs in inflation, historic Fed rate hikes, and geopolitical unrest.

As always, if you have any questions about how to rebalance your 401K, we encourage you to reach out to us!

MARKET UPDATE
FINANCIAL PLANNING

To download the January 2024 Newsletter: CLICK HERE

(Click on the Image to enlarge it.)