By:  Hellen Zaboulani

Despite all the pessimism, inflationary worries and uncertainties, 2023 was a good year for investors.  Overall, the stock markets gave a return of 26.6% for the year.  Tech stocks led the way following a disastrous year in 2022.  In 2023, the Nasdaq had one of its strongest years in the past two decades—finishing up 43%, per CNBC. The overall gain was slightly lower than 2020,and just shy of the index’s rise in 2009.  Tech giants led the way, including Meta (Mark Zuckerberg’s Facebook) which was up 194% in 2023, after being bashed in 2022.  Also, Nvidia, which made its name as a world leader in artificial intelligence, saw its stock price jump a whopping 239% over 2023.  Tesla’s stock jumped 101% for the year, and Amazon’s shares climbed 81% in 2023.

The year 2024 also shows promise, and though investors aren’t coming into the year with much optimism or pomp, that’s a good sign.  As per a recent article in the NY Post, the timid feelings entering and the worries about the reality of the economic situation lead to good things.  “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria,” Sir John Templeton famously said.  Despite all the skepticism, 2023 was a bull market, and once there is one year, it usually comes together with a second year.

The Post’s business writer Ken Fisher wrote that he expects “moderate double-digit S&P 500 gains, with big growth stocks leading early, and likely twisting to value stock leadership late in 2024.”  In his analysis, he said 2022’s bull market was extremely similar to 1966’s, and as he had predicted, 2023’s market was very similar to 1967. The S&P’s 1967 total return was 24%, compared to 26% last year. The widely predicted recession never came.  US Gross Domestic Product grew all year long. Inflation levels have slowed almost to normal.  Fisher wrote that he predicts the 1966 analogy will continue, with 2024 behaving similar to 1968, though some of the “parallels will start breaking down”.  He expects no recession, but rather positive returns in the S&P 500 of about 11%-18%. Fisher expects inflation to remain in check, with the Fed claiming victory and eventually cutting rates, even if only by a modest amount.

In the Post article, Fisher adds more reasons why 2024 will bring investors positive returns—namely that its an election year.  He says that the S&P 500 has regularly risen in 83.3% of all presidential election years since 1925, when the data started to be collected.  He went on to add that a Republican (maybe Donald Trump) will probably win the election, which will add more steam to the economy.  Fisher also added a third tidbit, saying that every single time the second year of any president’s term was negative, like it was for Biden in 2022, the following election year, namely 2024, has always been positive, ever since 1932’s Great Depression decline.

Per the Post, Fisher predicted moderate growth for 2024, with an increase in supply, which will help further normalize inflation, and lead to an incline in growth stocks.  He added that well-known worries and anxieties don’t stunt young bull markets.  It’s later on, when the optimism and euphoria grow out of hand that the bear lurks out.   Overall, Fisher’s projection for 2024 is for a good or even a great year.  We’ll drink to that.