2024 Year End Market Update
Dear Clients and Friends,
As we move into Q4 of 2024, we wanted to share a few important reminders to help you stay on track toward your financial goals. The headlines this quarter will continue to focus on interest rates, geopolitical developments, and the upcoming elections, but our focus remains on your long-term strategy.
Market Insight
2024 has been a strong year for investors. The stock market has done well over the past year and the portfolios have generated returns, both on fixed income and equity side. This growth has been supported by the Federal Reserve’s headline decision to cut interest rates by 50 basis points (.50%), signaling more cuts ahead although based upon recent numbers, they may have adjusted their path. Key factors influencing this decision include:
Easing inflation pressures
Signs of a slowing economy
Prior rate levels being considered restrictive
Although, recent numbers in the employment sector show they may not fall as much as previously thought. While we expect a more moderate pace of growth, the market outlook remains positive. As always, we emphasize the importance of time in the market over attempting to time it.
Elections
With the upcoming national election, we wanted to share some information that highlights a bit of history with the market and its relationship to who holds oƯice. We can see in the chart below that regardless of who holds the oƯice, S&P growth continues to increase over time. With certain periods where there is a dip, but throughout history it has almost always rebounded.
Similar to the first chart, the below chart highlights the congressional majority. Most of the time, over mid to long periods of time, the market trends steadily upwards.
Key Year-End Reminders
Prepare for 2025 Contributions: Start thinking about your 2025 contributions, ideally in January. We are here to assist you in gradually building assets over time, for instance setting up Automated Investment Plans (AIPs) to ensure consistent savings for your IRA, regular investment accounts, 401(k)/403(b), and company accounts. Furthermore, we recommend considering bumping up your retirement contributions by an extra 1 or 2 percent, as this small amount can build up over time.
Update your Beneficiaries:
Take a moment to review the beneficiaries on your IRAs, 401k, and other retirement accounts. Significant life events can warrant a beneficiary update to ensure your assets are distributed according to your wishes.
Review Required Minimum Distributions (RMDs):
For those 73 and older, don’t forget to take your Required Minimum Distributions from your retirement accounts. Missing the RMD deadline can lead to significant IRS penalties.
Insurance Coverage and Protection:
It's a good time to review your existing life, disability, health, and long-term care insurance, as well as your home and auto insurance policies. Ensure that you have adequate coverage in the right places, and feel free to contact us for a thorough review and guidance.
Keep an Eye on Future Expenses:
If you have any upcoming goals or life events, such as retirement, college expenses, building a home, or relocating, let's discuss them. We can help you build a budget that aligns with your objectives.
529 Plans:
With new laws put in place, 529 plans are becoming more and more beneficial in the long term. For example, with a new law in NY you can roll up to $35,000 of your balance into a Roth IRA or use up to $10,000 towards student loan repayments.
Review Your Budget and Beneficiaries:
Take time to review your budget, ensuring that it accommodates upcoming large expenses. We recommend evaluating before spending. See the attached helpful budget planning sheet, this may help you map out your budget for the near future. We are here to give you the tools to be successful. Additionally, confirm that your beneficiaries are up-to-date and aligned with your financial plan.
Evaluate your Debt:
Make extra debt payments if possible. We recommend that any debt at a high interest rate be paid oƯ as quickly as possible.
Consider Charity:
Charitable contributions can be an eƯective part of both your tax strategy and estate plan. We encourage you to discuss options with your accountant to maximize impact. As always enjoy the journey, spend time with family and friends. As we always say, time in the market, not trying to time the market, is what historically and consistently builds wealth over time. In short, stay the course and stick with the plan. We are here to help you each and every day, so do not hesitate to reach out; whether it is to schedule a WealthPlan or investment review, update projections, discuss any of the above reminders, etc. Wishing you a productive end to the year and continued success in 2025. Best Regards, Todd and the WSFG Team
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
