First Quarter Investment Commentary

Apr 10, 2024

Summary

  • Markets continued to rally in March, with the S&P 500 marking its fifth consecutive month of positive returns.
  • Inflation remained higher than preferred, but overall continued in the right (downward) direction.

Market Returns

Market Overview
Stock markets performed well in March, building on prior strength.

For the quarter:

  • Developed International Markets gained approximately 6%.
  • Emerging Markets stocks lagged, but were still up 2.4%.
  • Bonds were flat to slightly negative.

The Federal Reserve & Interest Rates

Expectations from The Federal Reserve indicate that while inflation will likely cool through the year, it may not decline be as quickly as previously anticipated. The Federal Reserve’s preferred inflation measure showed that prices rose as expected in February, putting a spotlight on whether price growth will decline enough to justify an interest rate cut by midyear.

The Federal Reserve left its key interest rate unchanged during the quarter and the Federal Open Market Committee (FOMC) maintained its outlook for three rate cuts in 2024.

Parting Thoughts

Many major indexes hit all-time highs during the quarter. 

While all-time highs can often result in investors wondering if they have missed the gains of the market, and consider waiting for a pullback to invest further, the data shows that is unlikely to be a successful strategy.

In fact, according to J.P. Morgan, investors are just as well off – or sometimes better – by putting money to work on days that hit all-time highs vs other days.  

Chart source: J.P. Morgan Guide to the Markets. FactSet, Standard & Poor’s.
**”Invest on any day” represents average of forward returns for the entire time period whereas “Invest at a new high” represents average of rolling forward returns calculated from each new S&P 500 high for the subsequent 3-months, 6-months, 1-year, 2-year and 3-year intervals, with data starting 1/1/1988 through 12/31/2023.

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Past performance is no guarantee of future returns.

The graphs and charts in this commentary are for illustrative purposes only and not indicative of any actual investment. Index returns do not reflect any fees, expenses, or sales charges. It is not possible to invest directly in an index. Stocks are not guaranteed and have been more volatile than other asset classes. Historical returns were the result of certain market factors and events which may not be repeated in the future. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgement in determining whether investments are appropriate for clients.

This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities.

  1. Data from Morningstar. Returns over one year are annualized.

Disclaimer: Investments are not guaranteed and are subject to investment risk, including possible loss of the principal amount invested. Past performance is no guarantee of future results. All allocations and opinions expressed are as of the date of this presentation and subject to change. The information contained herein does not constitute investment advice or a solicitation. Information obtained from 3rd parties is believed to be accurate, but has not been independently verified.

The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Think Different Financial Planning cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Think Different Financial Planning does not provide tax or legal advice, and nothing contained in these materials should be taken as such. As always please remember investing involves risk and possible loss of principal capital. Advisory services are only offered to clients or prospective clients where Think Different Financial Planning and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Think Different Financial Planning unless a client service agreement is in place.