Dougherty Dispatch: First 3 Months, 2024 In Review

The first quarter of the year maybe remembered by three notable economic headlines:

1. The economy has kept chugging along nicely.
2. The rising stock market that we saw at the end of 2023 generally continues.
3. Inflation rates have leveled off at rates lower than they were a few years ago, but not low enough for the federal reserve to lower interest rates.

Yes, economists now are putting off fears of a recession for 2024 as the stock market has risen 10% in the first quarter of the year, with several high-flying tech stocks leading the way.  As interest rates have stayed higher than expected, this has been a damper on stocks recently, and securities that are sensitive to high interest rates, such as utilities, and bonds continue to lag.  However, they represent good investments for those looking to put new money in places for good income (bonds, utilities, etc.)

Earlier in the year many experts predicted that the federal reserve would lower interest rates as many as five times during 2024. With inflation data remaining stubbornly high, experts are now predicting perhaps just a few reductions in interest rate reductions and perhaps an interest-rate hike. Although inflation has come down from its high, about 9% to a little more than 3%, it still hasn’t reached the Fed’s goal of 2%. And don’t confuse lowering inflation rates with lowering prices: Lower inflation just means that prices aren’t rising as quickly; unfortunately, it does not mean that prices are actually coming down.

So far, the historical tendency that presidential election years are good for markets has held true. Barring some unforeseen crisis or financial bubble, 2024 is likely to continue this trend. Caution: Do not be one of those investors that keeps money on the sidelines because of a prediction you’ve heard on television or the Internet. In the office, one of Seann’s favorite dictums is that “It’s not important to time when to be invested in the market, but rather how much time you have in the market.” Even if there is a dip, dips have historically proven to be temporary. However, missed opportunities from money sitting on the sidelines is difficult to make up.

Similarly, for fear of future market declines, an investor may be tempted to sell securities that have run up gains. This may be a good strategy if the security is now weak, but not if it continues to be a quality investment.  Remember, even good investments take two steps forward, then one back, then repeat.

By the Numbers

Below are three-month 2024 valuation changes next to valuation changes for all of 2023. 

Selected key asset groups: 

On a personal note, John is recovering very nicely from recent shoulder surgery, and is now debating with himself how much to follow his surgeon’s direction about cutting down on his tennis and golf.  He has just completed his physical therapy program and taking things slowly.  It’s just nice to be out of that nuisance sling.  We will keep you posted.

As always, we love to hear our readers’ reactions.

The Dougherty Investment Advisors Team

Past performance does not guarantee future results