Opinion: Stick to investment plans in 2024

Richard Baker

My friend is a comedic magician in Branson. One of his gigs is to get people to attempt to ride a unicycle while he steals their watch and shows it to the crowd behind their heads. It only works because he gets people distracted by struggling on the unicycle. I don’t know what crazy things will happen in the new year, but I know distracted investors will get left behind.

Don’t get on the unicycle.

Normal cycle
The year 2023 will go down as the year investors couldn’t go wrong. It had significant emotional highs and lows, but it was a great year for those who stayed invested. The Federal Reserve’s high-interest rates tempted some investors into certificates of deposit and Treasury bonds, only to miss out on the last few weeks of the year when the market took off.

In 2024, I expect markets to return to a more normal cycle. In the last couple of years, extreme conditions, such as Fed decisions, bank crises and inflation, have dominated the market. Still, I expect the new year to return to a profit-driven market, where growth is based on earnings. Investors will become focused on market patterns associated with declining interest rates.

Though rates will influence stock values most, corporate profits are moving into a sweet spot. Stocks look fully valued at current interest rates as we start 2024, but as the rates lower, values should increase, which could lead to mid to high single-digit returns in 2024.

Strange things
Don’t get caught up in the emotional drama. With 2024 being a presidential election year, it will have its own surprises and emotional challenges.

This may be the nastiest election cycle of our lifetime, and the risk of global wars will tempt many investors to make emotional investing decisions. Financially speaking, and probably emotionally too, don’t get caught up in the what-ifs and miss investment opportunities. Remember, some financial news shows and podcasts may sell ads on hyped-up drama, but you will retire on regularly investing in companies that create consistent earnings.

Do you remember the bank crisis at the beginning of 2023 that was going to destroy the banking system? Do you remember the high gas prices in the summer of 2022 that were supposed to bankrupt everyone? Do you remember when the container ship got stuck sideways in the Suez Canal in 2021 and was supposed to upset the markets for months? The markets overcame these obstacles, and the potential crises never came.

Strange things are always happening and will happen in 2024 as well. Don’t get distracted by the emotional drama because, with your money, there is more at risk than a few laughs at a Branson show. I see more reasons to be positive in the next year than negative.

So, find a financial professional you trust, have a good investment plan, and stick to it.

Richard Baker, an accredited investment fiduciary, is the founder and executive wealth adviser at Fervent Wealth Management LLC in Springfield. He can be reached at richard@ferventwm.com.