Q4 Investment Commentary
2024 Review and 2025 Outlook
The past year has been another banner year for the stock market. The S&P 500 set a new record high more than 50 times during the year and the index ended 2024 up 23.3%. That follows a gain of 24.2% in 2023. This is the first time since the late 1990’s that the index returned such strong performance back-to-back. Those gains more than offset the 19.4% loss seen in 2022, and on average, the S&P 500 has gained 9.4% year-over-year for the past three years. Bonds had a moderately strong year, particularly in comparison to the challenges the bond market has faced in recent years. The broad-based iShares U.S. Aggregate Bond fund returned 1.31% in 2024, a solid turnaround from the -1.8% that the fund has averaged over the past three years. The final weeks of the year were marked by increased volatility, however, as much of the post-election exuberance gave way to mounting uncertainty about what the coming year would bring. Resilient economic growth has caused the Federal Reserve to diminish the speed and scope of interest rate cuts, and many analysts and investors are uncertain of the path that the economy and the markets will take in 2025.