Quarterly Newsletter 2024 Q4
There’s something about autumn that is calming. Leaves change color creating beautiful scenery, summer heat fades away and days become shorter. The more things change, the more they stay the same. Familiarity and routine create comfort. These are important principals to consider as we approach another election. We live in emotionally charged times with too much information coming at us from all directions.
It is both our opportunity and responsibility to vote for candidates that we believe will best serve our country and citizens. Remember that others may not see political issues as you do and what is important to one person may not be as important to another. Different does not mean bad. Not only is it fine to disagree with each other, it is the American way. Navigate Private Wealth (NPW) clients come from may ethnicities, religious beliefs and political ideologies, not to mention different Universities (it is football season). Respecting those who are different from you has created the most successful society on earth and will in the future. So, stay calm and take comfort in things that are familiar knowing that the more things change, the more they stay the same.
2024 3nd Quarter Review
The third quarter went as we anticipated. Increased volatility in the stock market with a fairly large dip in early August that recovered only to have a smaller dip in early September. Stocks recovered hitting a new high at quarter’s end. The Federal Reserve increased once as we predicted with a large 0.50% increase in the federal lending rate.
2024 4th Quarter Preview
The economy has weakened a bit over the past few months, which could continue into the end of the year. Lower interest rates should spur on some additional growth slowing the downward trend. NPW anticipates more volatility, but we would not be surprised to see small gains by year-end. The election could bring some emotional volatility also. Navigate Private Wealth does not make investment decisions based on political events.
Bonds
Perhaps the most predictable cause and effect in all of the securities markets is between interest rate movement and bond prices. As interest rates increase, bond values decrease and as interest rates decrease, bond values increase. This was certainly true when the Federal Reserve decreased the Federal Lending rate by 0.50% in September. However, rates have increased a bit since then due to lending pressure, indicating that the Fed may have dropped rates a bit too much. NPW doubts the Federal Reserve will have additional rate cuts during the 4th quarter as the economy digests the latest cut.
US Stocks
Stocks had another good quarter in spite of a couple of pullbacks. So, where are we now? The stock market will be assessing the effects of the recent Federal Reserve rate increase. However, as seen in the graph below, the fourth quarter tends to perform better than the other three. This is mainly due to high retail spending and anticipation for the next year. We anticipate more volatility throughout the election due to emotions, but we wouldn’t be surprised to end the year a bit stronger.
International
International stocks had a good quarter with emerging markets making a strong surge in September. While this is good news, it appears to NPW that there are more important things happening in the US. We are not planning to increase international holdings at this time.
Did You Know?
"Black Friday" has evolved in meaning and impact over the years, initially referring to calamitous days, with a notable early instance being Black Friday (1869) in the US. This financial crisis saw a dramatic plunge in gold prices, affecting investors. The term was later used in American retail, starting ambiguously in the 1950s. Initially associated with workforce absenteeism post-Thanksgiving, it was reinterpreted by Philadelphia police to describe the shopping-induced congestion. Attempts at rebranding to "Big Friday" failed, and the term "Black Friday" solidified by the 1980s, referring to the pivotal point where retailers purportedly shifted from loss ("in the red") to profit ("in the black"). This day marks the unofficial start of the Christmas shopping season, with promotional sales aiming to draw large crowds. Black Friday is the busiest shopping day of the year in the United States and retailers prioritize it and Cyber Monday as highly profitable holiday shopping days.
Source: Wikipedia