Q3 Newsletter - 2024

Welcome! STP Raymond James is bringing you a digestible, rapid-fire overview of what we’re watching here in Q32024.

First Half Strength:

‍A strong start to the year for the S&P500 has historically led to a strong finish.

Bias-driven investing:

“U.S. presidential election years tend to be drama-filled and emotionally charged.

For some investors, that means more stress. But I’d recommend pushing in the opposite direction, by recommitting to being dispassionate, disciplined, patient, and focused on the long term. Even though it often feels like everything is riding on the outcome of the election, history reminds us—very clearly— that election results have not driven market results over the long term. The economy and corporate earnings do.” – Mitch Zacks

Certificates of Deposit:

‍Cash yields still appear attractive given the fed’s aggressive hiking cycle. However, investing at peak CD rates in the past has resulted in underperformance relative to other riskier assets such as stocks and bonds. Investors must realize there may be better options for deploying excess capital outside of CDs. Align your cash investments with near-term spending needs for optimal efficiency.

Growth’s Outperformance relative to Value:

‍this paradigm is now at its highest level since the Summer of 2000. For perspective, in the 7 years following July of 2000, Growth stocks declined 27% while Value stocks gained 84%. We are primarily Growth investors but have incrementally started to decrease exposure. Where are those profits being re-invested? Happy to discuss. In the last 10 years, US Growth stocks have gained a total of 355%, 16% annualized.

‍US Federal government interest payments on debt outpaces our National Defense budget now: ballooning Federal budgets with combined higher for longer interest rates have created quite the interest burden on the debt of our country. Will rates come down? Likely not due to what we believe will be inflationary impacts in 2025. Or will Capitol Hill decrease spending post-election? Likely not due to a bi-partisan support to spend that has momentum.

Disclosures: Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of the authors and are subject to change. There is no assurance the trends mentioned will continue or that the forecasts discussed will be realized. Past performance may not be indicative of future results. Diversification does not guarantee a profit nor protect against loss. Economic and market conditions are subject to change. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australasia and Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 is an unmanaged index of small-cap securities. Investing in smaller, newer companies generally involves greater risks and may not be appropriate for every investor. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. An investment cannot be made in these indexes. The performance mentioned does not include fees and charges, which would reduce an investor’s returns. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Companies engaged in business related to the technology sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. U.S. government bonds and Treasury notes are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury notes are certificates reflecting intermediate-term (2 - 10 years) obligations of the U.S. government. The Consumer Price Index is a measure of inflation compiled by the U.S. Bureau of Labor Studies.

Material created by Raymond James for use by its advisors. CDs are insured by the FDIC and offer a fixed rate of return, whereas the return and principal value of investment securities fluctuate with changes in market conditions. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material and does not constitute a recommendation. Raymond James is not affiliate with nor endorses Mitch Zacks.