2024 Fourth Quarter Commentary Report
Market Review
Global Market Performance
The fourth quarter of 2024 presented a complex landscape for markets to navigate. Anticipated U.S. policy changes under a new administration, coupled with political instability in South Korea, France, and Syria, contributed to heightened uncertainty. In the housing sector, 2024 home sales were initially poised for their worst year since 1995 but saw a significant rebound in November, recording their strongest annual gain since 2021. U.S. economic growth remained robust. A strong U.S. dollar accounted for most international equity market losses. The fourth quarter proved volatile, with mixed performance across global equity markets, though all major asset classes ended the year in positive territory. [i]
U.S. Stocks: +2.63%
International Developed Stocks: -7.43%
Emerging Markets Stocks: -8.01%
Global Real Estate Stocks: -9.02%
Bond Markets
The relationship between employment and inflation remains a central focus for economic policy. High employment tends to drive consumer spending, which can put upward pressure on prices (inflation), and vice versa. This dynamic was a key concern in 2022, raising fears of a wage-price spiral. The Federal Reserve, tasked with balancing “maximum employment” and price stability, continues to face this challenge, as the two goals often conflict. While the October employment report was dampened by hurricane-related disruptions, hiring continued to outperform expectations, exerting mild inflationary pressure. As a result, expectations for future rate cuts have diminished. The quarter saw two 0.25% rate cuts, but long-term interest rates, including mortgage rates, continued to rise. Inflation stands at 2.7%, still above the Federal Reserve’s 2% target.
U.S. Bond Market: -3.06%
Global Bonds (excluding the U.S.): +0.74%
Planning Perspective
Recent events, such as Hurricane Helene and the fires in Los Angeles, underscore the vital role insurance plays in safeguarding our financial well-being. Unfortunately, many households are underinsured. According to The Washington Post, fewer than 1% of households in Buncombe County, NC, had flood insurance, and in California, insurers have been dramatically increasing premiums or withdrawing coverage altogether due to rising risks.[ii] [iii] Many residents who lost homes in these disasters may struggle to rebuild without proper insurance coverage.
In recent years, rising real estate prices have increased the cost of rebuilding, while higher insurance premiums have contributed to inflation. It’s essential to review your insurance policies regularly to ensure they reflect the actual cost to rebuild and adequately protect your assets. Your home is a concentrated position in your financial portfolio and deserves comprehensive protection.
This year, we are emphasizing Risk Management as a focus area during annual reviews. We encourage discussions on various insurance needs—including life, disability, long-term care, health, homeowners, umbrella policies—and cybersecurity. As always, we welcome any questions and wish you a happy, healthy, and prosperous 2025.
Sincerely,
Myles B. Brandt, M.S., CFP®
[i] Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.
Market segment (index representation) as follows: US Stock Market (Russell 3000 Index), International Developed Stocks (MSCI World ex USA Index [net dividends]), Emerging Markets (MSCI Emerging Markets Index [net dividends]),
Global Real Estate (S&P Global REIT Index [net dividends]), US Bond Market (Bloomberg US Aggregate Bond Index), and Global Bond Market ex US (Bloomberg Global Aggregate ex-USD Bond Index [hedged to USD]). S&P data © 2024
S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. MSCI data © MSCI 2024, all
rights reserved. Bloomberg data provided by Bloomberg.
[ii] https://www.washingtonpost.com/climate-environment/2024/10/03/flood-insurance-program-hurricane-helene/
[iii] https://www.latimes.com/business/story/2025-01-12/california-homeowners-are-getting-cancelled-by-their-insurers-and-the-reasons-are-dubious