2024 Market Recap: Elections, Rates, and Resilient Markets

Who says markets can’t multitask? In 2024, financial markets shrugged off election-year turbulence and continued the bull market that began in late 2022. The S&P 500 posted a second consecutive year of gains and, this time, other developed markets joined the party, delivering positive global returns across the spectrum.  However, our bias in 2024 was more domestic and we were rewarded for this.

This resilience came despite a packed political calendar. More than 70 countries held elections, including the U.S., where the presidential race brought its usual mix of drama, speculation, and finger-pointing. Yet, as history consistently demonstrates, markets don’t particularly care who wins elections. Instead, they march to the beat of innovation, corporate profits, and human ingenuity—reminding all of us to keep our long-term focus intact.

Data from 1/1/2024 – 12/31/2024. Source: FactSet, Avantis Investors. Past performance is no guarantee of future results. Gross Domestic Product (GDP) is a measure of the total economic output in goods and services for an economy.

The Fed, Bond Yields, and the Art of Defying Expectations

The Federal Reserve also kept us guessing in 2024, cutting rates three times in the back half of the year, bringing the federal-funds rate to 4.25%–4.5%. Predictably, this sparked speculation about its implications for bonds, small-cap stocks, and everything in between. But in true market fashion, reality didn’t follow the script. While rates and bond yields often move in tandem, history shows they don’t always play nice. Since 1983, the 10-year Treasury yield has defied Fed rate moves about a third of the time—just enough to keep forecasters humble.

Going forward we continue to see big opportunities in bond markets.  Strategic bond positioning in 2024 led us to significant outperformance versus the aggregate bond market.  While stock markets have become increasingly efficient, we maintain an active approach to bond selection and the potential for lower rates continues to be favorable here.

Looking Ahead to 2025: New Leaders, New Opportunities, Same Old Market Truths

With Donald Trump returning to the Oval Office, 2025 kicks off with a changing political landscape and plenty of questions – Immigration Policy, Tariffs, Tax Reform? However, and most importantly, will any of it matter as much to markets as headlines suggest?

Financial markets thrive on unpredictability, and while elections and policies set the stage, the stars of the show remain innovation and global growth.

Personal Goal Setting for 2025: Let’s Plan Your Path to Success

As we embark on 2025, it’s the perfect time to reflect on your financial goals and milestones. Are you planning for retirement, purchasing a new home, funding education, or tackling another life-changing event? We are here to ensure your investment strategies are in step with your ambitions.

We encourage you to keep us updated on any evolving plans as we meet and discuss your financial outlook. Whether it’s adjusting for new opportunities or navigating unexpected challenges, consistent communication allows us to fine-tune your strategy and provide the most relevant support.

To our California clients affected by the recent wildfires, please know we are here to support you through this challenging time. Whether you need assistance navigating financial recovery or taking advantage of the IRS filing extension revised to October 15, 2025, we’re ready to help you stay on track toward your goals.

Let’s make 2025 a year of progress, resilience, and achievement. Together, we’ll ensure your financial journey is as smooth and rewarding as possible.