And, Breathe: Stock Markets Might Be A Bit Calmer Next Year

And, Breathe: Stock Markets Might Be A Bit Calmer Next Year
Paul Allison, CFA

2 months ago1 min

What’s going on here?

The stock market’s set up for a calmer year in 2024, although investors may end up nostalgic over the dizzy spells of 2023.

What does this mean?

Most folk will wake up on January 1st with a thumping headache and an unquenchable thirst. But there’s more than bacon and electrolytes on hand to keep you steady: with inflation letting up, interest rate cuts ahead, and optimistic company forecasts, 2024 could be a much calmer year for investors. Thing is, the effect of most of those market catalysts will already have been baked into stock prices, meaning it’ll take some even better – and most importantly, unexpected – news to pull the market even higher.

Why should I care?

For markets: Apocalypse later.

Artificial intelligence could become that surprise – but hopefully a pleasant one. If the tech manages to trickle into non-tech firms, cutting their costs and plumping their profits, it could spark something special in the market. But that’s the most optimistic outcome: artificial intelligence could wipe us out sooner than you could say “I, Robot”, but it’ll likely land somewhere in the middle, cruising through more development stages without transforming the world of business (yet).

The bigger picture: Patience is a virtue.

Mind you, if you’re laser-focused on 2024, you’ve already put yourself at a disadvantage. The virtues of investing with a long-term view have been celebrated for centuries, and for good reason. If you believe that economies will develop over time, which they tend to do as populations grow and productivity improves, then you’ll expect company profits to plod along too. So if you like it simple and have the patience, holding a bet on the market for years is hard to beat.

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Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

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