
By Stephen Kyne, CFP®
The markets in 2024 were dominated, largely, by AI/IT and the Fed.
The S&P 500 and the NASDAQ 100 were up 23% and 25%, respectively. On the surface that may appear to suggest that stocks, in general, did very well, however a deeper dig shows that a huge share of returns were limited to a very few stocks.
The “Magnificent 7” stocks make up nearly 33% of the S&P 500 that you often see quoted, and nearly 50% of the NASDAQ 100, the other 493 and 93, respectively, make up the rest. Weighting in these indices is proportional to the size of the companies. If you flatten it out and take all 500 companies in the S&P at equal weight, you’ll find a return of only about 12% for the year, which paints a very different picture. Investors have plowed funds into these few names, at the expense of the broader market.
Looking ahead to the new year, we are cautiously optimistic about US stock markets providing positive returns for 2025. Much will depend on the governing policies and priorities of the new administration, which we believe we’ll learn in rapid succession in the third week of January.
It was announced by the Presidend-elect that we’ll be re-naming the Gulf of Mexico the “Gulf of America”, as well as putting “substantial” economic pressure on Canada to surrender its sovereignty and become the 51st state. Once those very pressing issues are settled, maybe everything else will fall into place, and we can end this piece here.
If only that were true…







