The past year demonstrated remarkable resilience and growth across markets, despite economic and political uncertainties. Here is a brief summary of the key trends and insights from 2024. In addition, we’ve included a link at the end of our blog to a recent article by Dimensional, providing an in-depth analysis of the financial markets throughout 2024.
The U.S. stock market maintained strong momentum in 2024, with the S&P 500 achieving an impressive 25% gain. This marked the second consecutive year of over 20% growth, a milestone last reached in 1998-1999. Growth stocks, particularly those in the technology sector, significantly outperformed value stocks globally, buoyed by advancements in artificial intelligence. While U.S. markets led the charge, international developed markets delivered modest gains, and emerging markets experienced mixed results.
Economic and political developments shaped the year’s financial landscape. The Federal Reserve enacted three rate cuts, reducing the federal funds rate to a range of 4.25%-4.5% amid easing inflation and fluctuating labor market data. The U.S. elections resulted in Republican control of the presidency and Congress, continuing the historical trend of markets rising regardless of political leadership.
Diversification remained a crucial strategy for investors in 2024. High-profitability stocks outperformed their low-profitability counterparts, and small-cap stocks showed varied performance across regions. The bond market also displayed resilience, with slight gains in U.S. bond prices and a stronger performance in global bonds, which rose 3.4%.
As we move into 2025, maintaining a diversified portfolio aligned with your risk tolerance remains essential. By focusing on long-term goals and avoiding short-term market predictions, investors can navigate uncertainties while benefiting from innovation and growth. For a deeper exploration of these themes, we invite you to read the full article linked below.
Dimensional Market Review 2024
Past performance is no guarantee of future results. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.
In USD. For illustrative purposes only. New market highs are defined as months ending with the market above all previous levels for the sample period. Annualized compound returns are computed for the relevant time periods subsequent to new market highs and averaged across all new market highs observations. There were 1,175 observation months in the sample. January 1926–December 1989: S&P 500 Index; Stocks, Bonds, Bills and Inflation Yearbook™, Ibbotson Associates, Chicago. January 1990–present: S&P 500 Index (total return), S&P data © 2024 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission. Investment products: • Not FDIC Insured • Not Bank Guaranteed • May Lose Value
Dimensional Fund Advisors does not have any bank affiliates.The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Purposeful Wealth Advisors and not necessarily those of Raymond James.
