Q1 2025 Economic Commentary
If the last two years have taught us anything, it’s that inflation can become a formidable bar to clear when trying to achieve financial independence
January 9, 2025
If the last two years have taught us anything, it’s that inflation can become a formidable bar to clear when trying to achieve financial independence
This year, more than any other election year, I’ve been fielding questions about how the outcome of elections might affect your personal investments. T. Rowe Price put out some data earlier this year that showed the average stock market return in election years…
Election years are often marked by increased volatility. Investors are generally uncertain about potential policy changes and their impacts on various sectors. This uncertainty can lead to short-term fluctuations in stock prices. This is especially true when the election outcome is still highly unpredictable.
For some portfolio managers and investors, the desire for Fed interest rate cuts is akin to that of a sugar addict’s desire for his or her next candy fix. Both are signs that there are greater problems afoot. I’ll stick with the interest rate discussion since I’ve been known to enjoy one too many desserts, and I don’t qualify as a pillar of optimal health.
Seldom do I write in between my typical quarterly cycle of economic commentaries, but I feel compelled to do so today. Do you know what an economic “Supercycle” is? Depending on how old you are, you have witnessed at least one or two in your lifetime, and some of you have witnessed more. An economic Supercycle is a sustained period of expansion usually driven by robust growth in demand for products and services. (I pulled that definition from a Google search, which now seems so antiquated considering what lies ahead.)
The market finished off Quarter 4 of 2023 on a welcomed high note. Stocks and bonds got a significant lift from the talk of disinflation and potential interest rate cuts in 2024. The most overused term in finance – “soft landing” – is still the hope of investors going into the new year.
