![]() Resilience, Innovation, and Opportunities"The big money is not in the buying or the selling, but in the waiting" – Charlie Munger
By: Trajan Wealth December 2024 Market Review 2024 was a remarkable year for investors, showcasing the resilience of the U.S. economy and the power of innovation. Despite a weak December, strong equity market performance, stabilizing bond markets, and evolving fiscal and monetary policies shaped an eventful year. Key Takeaways:
The U.S. Economy: Growth Amid Transition 2024 marked a pivotal year for the U.S. economy. Inflationary pressures eased towards the Fed's 2% target which prompted the Federal Reserve to shift from aggressive rate hikes to a more accommodative stance – implementing its first rate cut in September. By the year's end, the Fed's forward guidance signaled limited cuts in 2025. With the Fed rate cycle in its final innings, monetary policy will take a backseat in 2025 as fiscal policy moves to the forefront under President Trump. Valuations and Risks: The S&P 500's forward price-to-earnings ratio closed the year at ~22×1, above the 25-year historical average of 19×1, raising concerns about the sustainability of current valuations. Concentration in a few mega-cap tech stocks amplifies risks, as their underperformance could significantly impact market returns. Recommendations For 2025
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