2024 Stock Market Predictions

Speaker 1 (00:00):

What will the stock market do in 2024? How will they perform? What about stocks? What about bonds? What is inflation gonna do? And when will the fed lower interest rates? Will they lower interest rates? What will be the best sector of 2024? Well, if you're watching this, you're in luck because here on the Retirement Power Hour, we are going to cover what all of the financial fortune tellers have to say about 2024. And yes, I'm being a little sarcastic there because we go through this ridiculous exercise every single year where you have these so-called experts who are telling investors what they think is gonna happen, and basically claiming to know the future, which every single year never fails. They are incredibly, incredibly wrong. But I'm gonna have some help today. I'm gonna bring on my partner in crime, Jay Waters, and Jay is going to join me in this quest. Jay and I, I've told our listeners we're gonna, we're gonna share all of what these fortune tellers are saying is gonna happen in 2024. So, you know, investors will know what stocks are gonna do. They'll know what bonds are gonna do. They'll know the best sector, so they'll know exactly how to invest their money, right?

Speaker 2 (01:13):

Sure. <laugh>, if that's what, uh, the people want to hear, and that's what, you know, gets, gets everyone views, then, uh, that that's what they will tell.

Speaker 1 (01:24):

Well, as I said before, I'm being sarcastic. And like you said before the show, if we have enough time, we might even tell you the winning Powerball numbers by the end of the program today. Uh, no, th this is not real. This is not how it works. Although every single year, I can see why investors get duped because they see these big name financial institutions telling us, well, here's what we think the market's gonna do, here's what sector we think is gonna perform. And we, we look at it and we almost just totally forget about what happened the year before. Because every year they make these predictions and we don't even look back and see if they were right last year. We don't pay any attention to what they've predicted for the past several years and whether or not they're right or wrong, but we just look at their prediction for the current year and we say, geez, it's, it's, uh, this big name financial company.

Speaker 1 (02:15):

They must be, right. Well, we're gonna enlighten you today. If you're, if you stick around for the whole video, you'll see we're gonna enlighten you that even though the the names are big, they are names that you've heard, it doesn't mean that you should just blindly start following and listening to everything they say. And yeah, we're gonna name some names Jay today. It's, it's just part of the exercise. There's, there's no hard feelings, but we have, we, we feel a certain way about people putting out these predictions because ultimately we feel they can be harmful to investors who are actually listening and, and moving their real money and their real dollars around based on these predictions.

Speaker 2 (02:54):

Yeah. And important to that is, you know, just because someone gets it right once doesn't mean they'll get it right again. And a lot of people will hold their hat on, you know, if you make 10 different predictions, you're bound to get one. Right? So, and once you get the once, once you get it right, once, then it's very easy to say, well, I got, you know, the Covid crash. Correct? I got the 2008 crash. Correct. And, you know, it's easy to get it right when you make 10 or 15 predictions,

Speaker 1 (03:21):

Or you make the same prediction 10 or 15 times, right? Eventually it's bound to be, right. So, Jay, let's talk about first before we talk about 2024, we have to look back and talk about what happened in 2023 and how that compared to the predictions that were made. 'cause I think that's gonna inform whether or not we should listen to the 2024 predictions. So talking about 2023, by the way, we have done this exact topic every single year. So be, be sure and go back and listen or watch those previous episodes. 'cause we have this same episode from last year, from two years ago. So go on YouTube. Go on Spotify. You can listen, you can watch, you could test us. You can, you can make sure that we we're telling the truth here, which we are. So last year there were a lot of predictions about the market, but what did the market do?

Speaker 1 (04:11):

Stocks in 2023 went up 24.23%, excluding dividends in the s and p 500. So over 24%, the average s and p return is just over 10%. So the stock market had a better than average year by a pretty good margin. And bonds, Jay also had a better than average year. Bonds went up 5.5%. The average bond return for an average year is 5%. So both stocks and bonds had a good year. The, the actual s and p 500 end of year price was $4,769 and 83 cents. And when we look at the average of the predictions though, that were made about 2023, the average s and p target for the end of the year was $4,096 and 13 cents representing only a 6.68% increase. Jay, the predictors were wrong once again, this time by approximately 17.5%.

Speaker 2 (05:17):

Yeah. When you, when you break it down in, in percentages, I think it helps people understand that if they did listen at all these predictors on the market only going up six, you know, 0.8%, that was the average. We, I mean, that was against 18 different firms, I think is, you know, the average. Yeah,

Speaker 1 (05:35):

We updated that number not to interrupt. And there were 23 firms that we, that we looked at 23 different firms. And these are Morgan Stanley, UBS, Wells Fargo, bank of America, yeah. Goldman Sachs. So you've done, these are the names,

Speaker 2 (05:51):

23 different companies that probably had wide variations of saying the market would do well or doing bad, and for the average just to be, you know, about level, you know, if someone listened to that, they, they could have possibly missed out on that 17.5%, which could make or break someone's retirement, right? If they're trying to get in and outta the market based off of what all these companies say. So sure. When you're, that, when they're that far off, 17.5%, that's a, that's a big difference.

Speaker 1 (06:19):

Uh, that's a huge difference, Jay. And, and you might wonder, well, maybe it was just 2023 that they got it wrong and maybe other years they're, they're correct. Well, again, you'd have to go back and watch our episode from last year. But no, the, what we saw, it was even worse for 2022. The predictions about 2022 were that the market would be up again. You usually see an average prediction of the market's gonna go up six, 7%. So it was the same for last year for, for 2022. And the market was down in 2022, it was down 18%. So you saw about a 25% incorrect prediction, you know, or the, the predictions were incorrect by about 25%. And you go back year by year and you continue to see this, this same pattern and the same trend. And by the way, for 2023, when you look at the 23 different firms that we evaluated, we looked at there, and this is public. I mean, you could go online and we'll, we'll include a lot of these links in our show notes, just so you can see, in fact, check us. But not one firm out of the 23, not one Jay predicted correctly what the s and p 500 was gonna do in 2023, not a single firm. Yeah. Isn't that, isn't that incredible

Speaker 2 (07:37):

<laugh>? It is. When they put the big statements out there that it is gonna happen if you claim to make those stakes, and again, like you said, not one single one was right. You most people would think that, that they would be right, because they are the big institution. They pound their chest and, and scream it on the news that, hey, this is what's gonna happen. And again, year after year, we see that it's incorrect.

Speaker 1 (07:58):

Jay, here's what happens is you, you have, like you said, normal investors that take these predictions and they say, oh, geez, so and so thinks the market's gonna go down by 10% this year. I better adjust my investments and not take so much risk because I'm getting close to retirement. I don't wanna lose my money, whatever the case may be. Or they think, uh, so and so thinks the market's gonna go up a bunch, so I'm gonna, I'm gonna all of a sudden get more aggressive. And it might not be a good thing for you to do that do it all comes back to timing the market. And this has really become more of an entertainment type of industry. It's not e it's not an educational industry as it's held out to be. These people on tv, I won't name any specific stations, but these people, these experts, these analysts on tv, they don't know any more about what the market's gonna do than you Jay, than me, than my next door neighbor who's not a financial advisor. We all know the same thing about what the market's gonna do the next 12 months, and that is zero because we don't know the future. You know, who, who was out there saying, Hey, COVID iss gonna happen. It's gonna cause a huge steep market decline. Who, who was talking about Covid in October before in, in October of 2019?

Speaker 2 (09:12):

To a degree. I almost think that some of these institutions don't care if they're right or wrong. Yeah. They just, whatever's gonna be the largest bold point that's gonna make people watch, make people click, make people talk about it, so then it drives more views to sure. Their page, to their institution, whatever it may be, where again, I don't know if they actually care at the end of the day, if it's right or wrong, it's just whatever's gonna get the most eyes on them.

Speaker 1 (09:37):

And that's, that's a great point too, because as you know, here, being an advisor serving individual clients and families, we are fiduciaries. We have to give advice that we feel is in the best interest of our clients. We have to act on their behalf. These people making predictions are not fiduciaries, they're not your fiduciary. They're just on a TV show, or they're, they're typing their opinions for a, an online publication or newspaper. They have no obligation to the person consuming that information. They have absolutely zero. And in fact, a lot of times you'll see that someone making a prediction, they have an incentive for you to listen. They have a, an the opposite incentive. They, they want you to listen. Maybe it's a bond manager, you know, you, you manage a bond fund and you're out there saying, well, stocks are gonna have their worst year ever.

Speaker 1 (10:29):

Well, why do you think you might be saying that? Maybe because you want people to flood their money into your bond funds. I mean, it's really not overly complicated to, to kind of see how these things work. Market manipulation is a, I think is a real thing. I'm, I don't think I'm a conspiracy theorist for saying that there are people that go on these publications and these TV shows that try to manipulate markets, and maybe they're hedge fund managers, maybe they're bond fund managers, but the end of the day, they have no obligation to you, uh, the end listener.

Speaker 2 (11:02):

Yeah, there was a lot of good instances actually during Covid where I can recall it exactly, where some hedge fund managers I know went on these talk shows and, you know, screamed bloody murder pretty much that the market and the world was gonna come to an end. And again, it's, there's always an ill motive or an incentive behind it. Typically, when these people on these big talk shows talk about what exactly the market's gonna do, like they have the crystal ball sure. And to a degree, the ones outside the hedge funds and just, you know, people on different talk shows that really don't know much of anything about the market usually aren't even licensed. And they still make these, these statements because like you said, at the end of the day, they're not a fiduciary, they're not your fiduciary, and they also don't know your situation.

Speaker 1 (11:50):

Absolutely. Well, there's more about 2023 Michael Aone of State Street. Now let me, let me clarify this, because Michael said, and even in, in last year's predictions that this, this exercise is very pointless. He's done it for a long time. It's pointless exercise, so I don't want to be too hard on him. You've got, you've got people out there saying, look, here's what I think, but I don't, I don't know if it's gonna happen, right? This is a ridiculous exercise. He's one of these people, so, you know, he gets half credit, but he said European stocks will outperform US stocks in 2023. Well, that didn't happen. European stocks rep 12.64%, we talked about US stocks, uh, being up more than that. He also said, uh, financial stocks would outperform the market there he was correct. Financial stocks were up 25% versus US stocks on the market being up 24.23%.

Speaker 1 (12:47):

So he is marginally right there. David Wagner from Apti Capital, he said that volatility in 2023 could stay very high. It was very high in 2022. And he said that type of volatility could stay around for 2023. Well, 2023 was, is not what I would call a volatile year. In fact, there were just 63 trading days where the market swung over 1%. The average, the 10 year average is 59 days. So it was pretty much an average year in terms of volatility. David Ryan, former hedge fund manager and protege of IBD founder William J. O'Neill, said, value stocks would outperform growth in 2023. That didn't happen. Large growth was up 42 plus percent versus large value, which was up 11.46%. Small growth was up 18.6% versus small value, which was up 14.6%. So we, we, we didn't even see that being close, uh, on that prediction because growth did so well in 2023.

Speaker 1 (13:57):

This is one of my favorite ones, Jay, uh, IMF Reuters said on inflation, the worst is yet to come for 2023. <laugh> and inflation in 2022 peaked about mid-year peaked in June of 2022 at 9.1%. It was high, it had come down by the end of 2022. But again, this, this article comes out as the worst is yet to come was not even close. Inflation ended the year in 2023 at 3.4%. It pretty much did nothing but fall, uh, hit sort of that bottom and, and stayed stable at the end of 2023. So really, again, not, not even close. So you think about any other walk of life where someone makes a prediction and they're that wrong, no one's ever gonna listen to them again. You know, think, think about your weatherman. Your weatherman says it's gonna be 80 degrees outside tomorrow, guys, and then it's 20. I mean, that's basically the equivalent here. Yeah. Uh, I know the weatherman's wrong. Usually they're <laugh> marginally wrong. But, uh,

Speaker 2 (15:01):

Even worse, I, I think of a doctor, right? Think of a doctor making a, a recommendation that hey, you have one year to live

Speaker 1 (15:09):

Sure, yeah.

Speaker 2 (15:10):

For six months. And then you, you live another 40 years, you know, you right? You're gonna live your life a lot differently if, you know you have six months left, right? Compared to you living another 40 years. Yeah.

Speaker 1 (15:19):

Right? You got stage four cancer, so get your affairs in order and you actually didn't have it at all. Cancer. Yeah. That's about how far apart some of these predictions are. A couple more. The Motley Fool. You know, this is a publication a lot of people look at, a lot of people follow the Motley Fool and listen, and they said healthcare would be the top sector in 2023. Well, healthcare only rose 0.3% certainly wasn't the top sector. Again, not even close. Uh, not only wrong, but just so far off, you know, over 20%. And Motley Fool said Apple would fall below a hundred dollars a share in 2023. Well, it just didn't happen. Jay Apple went up 48.91% in 2023, and it started the year around one 20 in the one twenties. It never closed below 1 24 in 2023. And that was in January of 2023. And it just basically continued to rise and closed the year at 1 92.

Speaker 2 (16:24):

Yeah.

Speaker 1 (16:25):

So huge,

Speaker 2 (16:26):

Huge difference.

Speaker 1 (16:27):

Yeah, you gotta understand the, these people are in the business of making predictions. They're not in the business of representing you <laugh>. They're not in the business of getting it right. They're just in the business of making predictions. If they can have people continue to come back and listen, well, they'll, they'll stay in business. So now when we go over these 20, 24 predictions, Jay, we'll just, you know, kind of bounce these back and forth here. But I want everyone listening to not forget what we just talked about. You know, and I, I have to always say that, but don't forget what we just talked about. We're just, we're just putting this out there so that next year we can come around and say, well, here's what they said last year, and here's what actually happened. So you have a wide range of s and p targets.

Speaker 1 (17:11):

When you look at 2024, what these institutions think, and again, we're looking at JP Morgan, it's predicting an 11% decline this year. Morgan Stanley predicting a 4.6% decline. Wells Fargo, a 2% decline. UBS basically flat, about a half a percent down. You've got Goldman Sachs, R-B-C-B-M-O, Deutsche Bank, Citi, they're all predicting an 8.1% market increase for 2024. And then you've got Oppenheimer Asset Management predicting a 10.2% increase. Ardini research predicting a 14.4% increase. And they were the, the biggest bull market predictor in, in this group of, of firms that we looked at, which also include included Barclays and Bank of America who thought the market would go up 1.7 and 6% respectively.

Speaker 2 (18:08):

And what's, you know, outstanding on these numbers and all these different institutions is that they are all supposed to be market experts, right? Because they're making these predictions. And if all these institutions have the crystal ball, why is everyone's answer so different, right? If JP Morgan is assuming 11% drop, but Bank of America's on the opposite end, assuming a 6% increase, I mean, that's a 17% spread on, right? I mean, one's predicting a good market, one's predicting a bad market. That's right. Two opposite ends of the poll. And both of these are people that you know, are household names that they see all the time on the news that sure, uh, are been around for a long time and they're giving two completely different answers.

Speaker 1 (18:50):

Someone's gotta be wrong,

Speaker 2 (18:51):

Someone's gotta be wrong.

Speaker 1 (18:53):

Someone is not credible in this group, and they're spoiler alert, it's all of them. You know, they're not these, these are not credible predictions. Kudos to the ones that say, look, we, we don't know, but bad kudos for them continuing to put predictions. If they really believe that they don't know what they're talking about, they would just stop doing it. You know, the, we don't put a carcin area end of your target prediction out, because we don't know. We're just being honest about that. Here's some other predictions. Jay BlackRock says, stocks and bonds will deliver positive returns and cash will underperform both. Great, I hope so. Morgan Stanley, they, Morgan Stanley says, diversify away from the magnificent seven J and go for value over growth. They like financials, industrials, utilities, consumer staples and healthcare. Those are their favorite sectors. Those are the ones that are gonna do well this year. We'll, we'll see. Uh, I got a couple more. Jay James, dimmer, chief Investment Officer at Main Street Research says the AI fueled bull market could just be getting started. So again, we, we don't know, Jay, there's a couple more, I'll bounce some off you here.

Speaker 2 (20:09):

LPL recommends large cap growth over large cap value for 2024. Again, don't know which way it's gonna go, growth or value. I think earlier you had just said that we did, the distinction between growth and value and growth was up 40 and, and value wasn't even close to that. Again, looking at, uh, Nigel Green, founder of CEO of De Vere group says, well, <laugh>, the magnificent seven will continue to perform well, but may not surpass the highs of 2023. Jeffrey Buck binder, <laugh> chief equity strategist for, again, LPL says, investors should expect stock market volatility in 2024 leading up to the November election. And again, we hear that a lot. We always hear, I think last year we heard, well, the year leading up to an election, there's a lot of swings because people know which way the election's gonna go. Again, same thing here during an election year, which way the market's gonna swing. We, we don't know. Uh, this one even says it's a lot of these are, are vague assumptions, right? They should expect it could be, right? Correct. Um, they don't, they don't know for certain. They're not using absolutes, which is a good thing. You shouldn't use absolutes. Uh, sure we're making those predictions, but they don't know at the end of the day.

Speaker 1 (21:24):

Yeah. Then, then you have, uh, again, we have to do it. We, the Motley Fool, they, they have an article here. There's 10 different predictions. Jay 10. Uh, they, some of their predictions include the economy will dip into a recession in 2024. The bear market will return in 2024, the yield inversion will end, REITs will thrive, or real estate will thrive. Core inflation will remain stubbornly high. If not re-accelerate. The AI artificial intelligence bubble will begin to burst. Utilities will be a top three sector in 2024, and Tesla will fall below $100 a share, which it's currently trading over $200 a share. So, pretty bold prediction. We'll see. And you know, as, as many predictions here we're, we're positive, you've always got that one person in the back saying, Hey, this is gonna be the worst year ever. It's just gonna, the, the market's gonna crash. It's gonna be like the Great Depression. I can't tell you how many times I've heard that prediction, Jay, so many times this year, it's none other than Mr. Harry Dent who told Fox News. I think 2024 is gonna be the biggest single crash year we'll see in our lifetimes. So according to this, this guy, uh,

Speaker 2 (22:44):

The world might as well be ending according to this guy,

Speaker 1 (22:46):

Look like it's

Speaker 2 (22:47):

Going. If that truly happened, I always tell people, right, if, if we, if people really thought it was gonna go to the, you know, go down 86%, 92%, 96%, and all these different sectors, that would be yes, terrifying. But to a degree, if that actually happened, I always tell people, I think that there'd be a lot more other stuff going on that you'd be worried about. That's right. Than the stock market going down. You're probably worried about where you're gonna get food. Oh yeah. Is the electric gonna get turned on because it's a, it'd be a mass catastrophe where yeah, stock market's not gonna be the worry, it's gonna be normal survival at that point. If we went down 96%, which yep, just is excessively unlikely,

Speaker 1 (23:30):

You know, and, and that prediction, those predictions are so extreme that, you know, it's almost, dare I say, I can't say it's criminal, but, and I wanna, I wanna write a scathing letter to, to Harry Dent and, and making such a bold, outlandish, extreme prediction, just very irresponsible to make such a prediction. So here's what listeners should take away from the, the wide range of predictions. Number one, you always expect and be prepared for the stock market to fluctuate for stocks and bonds to go up and down. Number two, have a plan for when that could possibly happen. Number three, understand when might you need to withdraw the money that you have invested. And then you need to set up your investments accordingly. And here we go. You know, once again, it's like being a dead horse. We're doing the same topic. It's, it's my, it's my most and least favorite topic of the year, Jay. I enjoy doing it because I, I like just calling these people out. It's a little bit fun, but at the same time, I know that so many people out there are being misled. And that's why I don't like it.

Speaker 2 (24:39):

Yeah, I completely agree. It is, it's, it's saddening that, again, all these institutions wanna drive fear into people. And of all these companies, you know, some are on the optimistic side, some are on the very, very, you know, bearish side. Most people aren't gonna read the article of we're, you know, gonna have a 50% bull year, right? That, I don't think I've ever seen an article where it talks about that. Usually it's the opposite of, we're gonna have a, see, we're gonna see a 50% correction.

Speaker 1 (25:05):

Or like we say, the, the no one's gonna click on the article that says, Hey, the market's gonna go up. It's gonna go down. Have a plan, don't worry about it. Stick to the plan. Yeah, that's it. That's not, that's two

Speaker 2 (25:18):

Sentence article. And you could even say that the market's gonna be flat, right? I mean, we don't know. But even if it said, Hey, the market's just not going to, it's gonna end where it began. It's just not a newsworthy article or a, a click bait article.

Speaker 1 (25:32):

But, but the fundamental principles of investing that we share is also is, is not meant to. They're not gonna elicit a lot of emotions because good investing is not done with your emotions. So they, they're not popular headlines to say, just stick to your plan. Remember, those fundamentals keep a long-term focus. These are not things that elicit a lot of emotions and, and therefore they're not worthy to make the headlines for these publications. But with that being said, we've covered a lot. We've covered, looked at 2023. Same thing that happened every year. We've done, this topic happened again, the predictors were wrong. We, we shared some of their predictions for 2024. We've told you what we think you should do for 2024. And so don't forget those keys and make sure you go back and check out some of these old shows if you need some more convincing. So make sure you go and check those out. But Jay, thank you for joining me again this year to cover this topic. Appreciate your time

Speaker 2 (26:34):

And we'll be back in, uh, 2025 to see who was, you know, luckily right, and who was wrong.

Speaker 1 (26:42):

Absolutely. Thanks to Jay. And with that, I want to thank you all for watching and listening. Don't forget to go to retirement power hour podcast.com where you can view all of our past shows. You can also submit a question if you have a question about your situation. Maybe you're looking for an advisor and, and you want a second opinion, you can go submit your question or you can click a button that says, work with me. The first step is gonna be you scheduling a call with me. We can talk about your situation to see if we're a good fit to help and to see if you would like us to help you. So that would be work with me. Again, you can submit your question. It's no obligation and we'll read it on a future show. It might be about social security, might be about retirement investing.

Speaker 1 (27:22):

So go to retirement power hour podcast.com. By the way, if you found that this episode was helpful, we would really appreciate for you to leave us a review. You can leave us a review on YouTube, on Apple, on Spotify's, a lot of good places that you can leave us a review Google as well. So do us a favor and leave us a review. We would appreciate that. With that, I wanna thank you again for watching. We'll catch you next time on the Retirement Power Hour, where we help listeners invest wiser and retire better. Take care.

Speaker 3 (27:53):

Thank you for listening to the Retirement Power Hour podcast. All material discussed on this podcast is for educational purposes only and should not be construed as individual tax, legal, or investment advice. Investing involves risk of loss and investors should be prepared to bear potential losses. Past performance may not be indicative of future results. Joe Allaria is an investment advisor representative of Carson Allaria Wealth Management, a registered investment advisory firm. Information discussed on this podcast may be derived from third parties that are believed to be reliable, but Caral a wealth management does not control or guarantee the accuracy or timeliness of such information and disclaims all liability for damages resulting from such sources. Any references to third parties are provided as a convenience and do not constitute an endorsement.