I hope you and yours are doing great! As 2023 ends and 2024 begins, now is a great time to take inventory of your finances and make a list of steps you need to take move the needle on your financial future. (Not to mention, it gives you a few minutes away from a house full of holiday guests!)
To help, I thought I’d share a few tips on where to focus your efforts as you start to think about the new year:
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Review your – Take time to reflect on your financial goals from 2023 and assess your progress. Have you met the goals you set at the beginning of the 2023? If not, what steps can you take now to make it happen in 2024?
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– Review your spending habits over the past year; try using our budgeting software (its part of BayRock’s RightCapital package) to see your actual expenses and identify areas where you need to cut back or adjust. Looking at the data will help you create a more efficient and realistic budget for the coming year.
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Maximize –
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If you haven’t already done so, consider contributing the to your retirement accounts. This will reduce your taxable income and help you build a healthy retirement nest egg.
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Take advantage of – Explore all available . You may want to consider making charitable donations before the end of the year to reduce your tax liability. Remember, it’s best to consult a tax professional for personalized advice.
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Plan for tax season – Gather and organize all your financial and tax-related documents to make the tax-filing process smoother. Start researching potential tax changes that may affect you in the upcoming year.
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– Evaluate your insurance policies, including health, home, auto, and life insurance. Let your agent know of any significant life events or adjustments to ensure you have appropriate coverage and aren’t paying for frivolous extras.
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Set goals for the upcoming year – Whether saving for a down payment, paying off debt, building an emergency fund, or budgeting for a major purchase, having a plan will help you stay on track.
Remember, staying financially healthy is an ongoing process that requires regular monitoring and frequent adjustments. If you need help or have questions, I’m here to help however I can, so don’t hesitate to give me a call or shoot me an email.
Last Weekly Market Update of 2023
Major US stock indexes rose again last week, courtesy of a dovish Federal Reserve (Fed) tone that markets have been waiting for. More on the Fed in just a second!
Overall, last week, the** **S&P 500 rose by , the Nasdaq 100 tacked on , and the Dow Jones Industrial Average increased by %—ending the week at an all-time weekly closing high.
Stock Index Highlights
Given the impressiveness of stock indexes of late, it’s worth digging a bit deeper into each index:
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S&P 500: Posting its since 2017, the broadest measure of the U.S. economy continued its recent march upward, featuring broadening sector strength.
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Dow Jones Industrial Average: The Dow closed for the first time in history last week, as Federal Reserve Chair Jerome Powell hinted at rate cuts.
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Nasdaq 100: The Magnificent 7, while “expensive” by some , fared well last week, with the overall index also up 47% so far this year.
This week (Monday) features an index rebalancing of the Nasdaq 100, with some stocks being cut and others being added. For example, eBay is out of the index as of Monday, and database builder juggernaut MongoDB is in.
Federal Reserve Tone Pivot
At last week’s meeting, the Fed left benchmark interest rates at the 5.25% – 5.50% level—marking three consecutive meetings of unchanged interest rate policy.
Most importantly, the Fed indicated a higher likelihood of pivoting to a more accommodating monetary policy stance soon (think rate cuts).
According to Fed members, the most recent projections indicate the possibility of three 25-basis-point rate cuts in 2024.
Markets loved the more Fed last week, and the bulls kept charging, leading major U.S. stock indexes higher and Treasury yields lower.
Full Shopping Carts
The Teflon-like U.S. consumer continued to spend in November, as U.S. retail sales rose 0.3% for the month, from the 0.2% decline in October and stomping expectations of a 0.1% fall.
Falling gas prices may have helped to bolster the consumer despite a slide of 2.9% in gas station receipts.
Notable spending highlights included gains at bars, restaurants, sporting goods stores, hobby stores, and online retailers.
CPI Near Expectations
Prices for consumer goods and services, as measured by the Consumer Price Index (CPI), edged slightly higher month-over-month in November, showing a 0.1% increase from October and a 3.1% year-over-year rise, according to from the Labor Department.
The measurements were with expectations, with Dow Jones economists expecting no change month-over-month and 3.1% year-over-year.
The report was “somewhat in line, although, I suppose not as good as what some might have hoped that we would start to see more deceleration on a month-over-month basis,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.
While the data was good but could have been even better, markets remained in a good mood. In fact, the S&P 500 touched the since January of 2022 on the same day as the data release, with the markets looking ahead to the Fed the next day.
The Weeks Ahead
The economic data calendar is usually a quiet one heading into the Christmas weekend. U.S. equity markets will be closed on Monday, December 25th, in observance of Christmas.
We will get the Fed’s preferred gauge of inflation data via the Personal Consumption Expenditures (PCE) metric and consumer confidence data this week. An in-line reading in PCE could further fuel the markets, providing some confirmation/clarification of the CPI data from last week.
We will also be paying attention to final GDP data, unemployment claims, and University of Michigan Consumer sentiment this week.
Has investor appetite gotten ahead of itself in the short term in anticipation of rate cuts? Let’s see how the final two weeks go and if Santa Claus can find his way to the markets with his rally.
Looking Ahead: Home Stretch
At the beginning of every New Year, it’s a good time to discuss your investment objectives. Your goals: Have they changed or do they remain the same? Have you discussed your capital gains/losses situation with your tax advisor? Is tax loss harvesting appropriate for you?
As you consider any of these questions or other financial matters heading into 2024, please feel free to contact me by email or phone if I can be of service.
Again, Happy Holidays to you and your family!
