Market Outlook Spring 2024
Take the Win and Be Happy
Let's go out and enjoy the outdoors before the heat comes roaring in. We probably have about six to seven weeks. You know I look back on January 12th when I came out with my stock market prediction, which I do every year, which is a real gamble, but I went ahead and committed it to paper. I said I thought we would end up with an 8% to 12% return for 2024. So far, right on target. I want to go back and rehash some of the indicators that I mentioned back in January https://www.romanojohn.com/Our--Newsletters.11.htm for reasons to be happy about the market. And then I'm going to talk about some new ones.
• Federal Reserve Policy: The Fed is expected to continue lowering interest rates, which is seen as positive for the stock market.
• Impact on Industries: Lower interest rates are expected to stimulate demand in various industries related to housing, such as construction, manufacturing, and home appliances.
• Impact on Investments: With the Federal Reserve easing, yields on money market accounts, CDs, and savings accounts are likely to drop, potentially leading some investors to allocate more funds into the stock market.
• Stock Buybacks: a move that could reduce the supply of available stocks and potentially drive-up prices, making it an opportune time for investors. Expected buybacks are up to 1 trillion this year. (1)
• Wealth Effect: Positive stock market performance and increase of housing values tends to stimulate consumer spending, further boosting the economy.
I’ve Saved the Best for Last
Thanks to advancements in artificial intelligence, I'm witnessing anticipated boosts in productivity that border on the incredible. We're talking about achieving productivity gains in the double digit. Ordinarily, the U.S. economy sees growth rates of 2% to 3% annually, but projections indicate a significant surge beyond that range. While the exact extent of this growth remains uncertain, it's expected to mark the most substantial productivity leap for American workers since the internet. I do know that when companies enhance productivity, profits follow suit, ultimately propelling market dynamics.
Reflecting on my own journey, I recall being advised early in my career that I wouldn't reach my full productivity potential until I enlisted assistance to handle administrative tasks. Taking heed, I promptly acquired such support. Consider, if you will, whether you're now retired or if you have conversations with younger generations, the pervasive challenge of administrative burdens faced by many Americans. They often find themselves mired in paperwork and tasks they'd rather not undertake. Imagine the potential productivity gains if everyone had access to one or two assistants.
While such resources might not have been feasible in the past due to various constraints, the advent of artificial intelligence raises intriguing possibilities. Could AI provide virtual assistants to alleviate mundane tasks for everyone? I know I couldn't do what I do without my administrative help. And this is where the productivity is going to come in. It will be great to see.
Many Thanks
I wanted to thank you all for the great referrals. Back in January, I mentioned that we wanted to bring in some new clients, and I think we had a target of 24. And we have done about 40% of that. And that's all thanks to you! You referred us to some of your kids, and your friends, and we really appreciate that. Let's take the stock market wins in 2023 and 2024 and be happy. Have a great spring!
Best Regards,
John Romano, CFP®
Office Phone #: 352-753-8590
Email: john@romanojohn.com
References:
1. https://www.vox.com/future-perfect/24108787/ai-economic-growth-explosive-automation
Data contained in this newsletter is obtained from what are considered reliable sources; however, its accuracy, completeness, or reliability cannot be guaranteed.
John Romano, CERTIFIED FINANCIAL PLANNER™, has over 30 years of experience in the financial field. John is a Registered Representative with Securities America, Inc. (a member of the FINRA and SIPC) and an Investment Advisor Representative with Securities America Advisors. He has prepared hundreds of reports for retirees to assist in their retirement income planning needs. He is dedicated to providing portfolio analysis, dividend and income information, and investment management services to retirees (and those preparing to retire) in The Villages, Florida, and throughout the United States.
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