Investing isn’t easy. It’s incredibly competitive and attracts many intelligent minds due to the stakes at hand. It is impacted by many variables, and most of the important ones that move the market are unknown and under constant change. Then there is the human element of it, which at times can prove to be the most challenging. As we reflect on the past year, HFS’ 2024 outlook proved to be fairly accurate. This is not something that we take for granted or expect to achieve with precise accuracy on an annual basis. Thankfully, to be successful at investing, you don’t need to be right all the time – just more than you’re wrong.

Source: HFS 2024 Market Outlook

At the time, our bullish 2024 outlook was met with a fair amount of skepticism. Recession was still on the minds of many, and consensus was looking for subdued gains – less than 2% on average according the 20 price target estimates from Wall Street strategists submitted to Bloomberg. Many notable firms, such as JPMorgan, Morgan Stanley, and Wells Fargo, were forecasting negative returns in 2024 for the S&P 500. Even our home office, Northwestern Mutual, was very vocal calling for a recession and was uneasy with our optimism.

However, we were looking at the market in a different way. While we consider macro factors, that’s not our only lens. We also gather intelligence at the ground level by listening to corporate earnings calls in various sectors. Here, there wasn’t pervasive talk about recession. Instead, consumer spending remained healthy and corporate spending on advertising and computing infrastructure was beginning to reaccelerate. This was the first part of our bullish thesis – corporate earnings were rebounding.

The second part was that the Fed wasn’t going to cause any more proverbial pain with rate hikes. Unlike many others, we didn’t think the market needed interest rate cuts for stocks to move higher. Rather, we felt that the equities just needed a firm ground to continue their recovery from a broad bear market in 2022. HFS believed that all was needed was for the Fed to get out of the way.

Lastly, we felt that the opportunity of artificial intelligence wasn’t being fully appreciated by investors. At the beginning of 2024, there were many skeptics of this emerging technology. Some joked about how frequent firms mentioned the term “AI” on their conference calls, suggesting that a lot of it was just shallow hype – vaporware. Even the few that were believers assumed that the opportunity was missed, judging by the strong gains in Nvidia’s stock during 2023. HFS felt otherwise – the AI opportunity was just in its early innings of massive transformation. It was going to happen regardless of inflation, the next Fed move, or who would win the Presidential Election.

We thank our loyal clients and readers of this publication. We hope even those outside of the HFS family were able to use our investment perspective to their advantage.

Happy holidays!

The opinions expressed are those of Harrison Financial Services as of December 20, 2024 and are subject to change. There is no guarantee that any forecasts made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment or security. Please remember that all investments carry some level of risk, including the potential loss of principal invested. Past performance is not indicative of future performance.