The Market is Not the Headlines

If I would have told you at the start of 2023 that…

….The conflict between Russia and The Ukraine would continue

…The Fed Funds rate would keep climbing up to 5.5%

…Inflation would stubbornly remain above the Federal Reserve’s 2% target

….The 30-year fixed mortgage would surpass 8%

…Fitch would downgrade the United States’ credit rating

…Spy balloons from China would float over the United States

…There would be multiple bank failures, including important institutions like Silicon Valley Bank, Signature bank, Credit Suisse, and First Republic

…There would be significant labor strife, with protracted strikes at the big three automakers as well as in Hollywood

…For the first time in history, the US House of Representatives would vote to remove the Speaker of the House and then spend weeks bickering about his replacement all with a government shutdown imminent

…A significant conflict would begin in the Middle East

…Many other negative headlines and actions would happen throughout the world

You probably would have justifiably guessed that the US markets would have been down significantly.

Instead, the S&P 500 was up more than 24% and the NASDAQ 100 had its best year since 1999.

I’ve written before that the market is not the economy, but I think it’s important to remember that the market is not the headlines, either.

2024 is a Presidential election year – and likely a contentious one. In some cases, there will be negative headlines several times a day. There will be consistent noise about the US economy and the future of the country. It will be difficult to ignore.

Historically, though, Presidential election years are great times to invest. In the last 15 Presidential election cycles, the S&P 500 has been up 13 times. The two down years were 2000 (the bursting of the tech bubble) and 2008 (the global financial crisis).

While it won’t be easy, ignoring the noise and keeping politics out of your portfolio is the best course. Stick to your plan no matter what the loudest voices say.

Here’s hoping you enjoy a healthy, prosperous 2024.

Photo by Roman Kraft on Unsplash