November 2024
Dear Friends, Dear Investors,
Well, there we are, the last source of uncertainty for the year has been resolved. For the second time only in US history, a former president has been reelected for a second non-consecutive term (for Trivial Pursuit aficionados, the first one was Grover Cleveland). Donald Trump is back for four more years, and the focus will be on whether he will pursue his campaign promises or not.
Regardless, it feels good to take a bit of a breather and worry about the impact of his policies on the economy when he takes office next year. As we had repeatedly told many of you, for investment purposes, it did not necessarily matter who was elected, as long as the result was quick and decisive and that it was. We also told you that volatility was quite elevated previous to the election and that it would come down hard once we were past it and that this could quite quickly push the S&P 500 to 6000 points, and this has happened as well (the S&P 500 closed election week at 5995, close enough).
Last month, we wrote: “We believe this is a month-long consolidation in a bull market and that stocks should resume their upside course until the end of the year.” We still believe that to be the case but, interestingly, this only holds true in the US. European markets mostly stalled or fell after the election, which is probably out of fear of potential new US tariffs coming next year. It also didn’t help that, the same day the results came in, Germany’s ruling coalition imploded in mid-air. This just goes to show that, as in every year, there will be plenty to worry about in 2025.
Regardless of things to be potentially worried about, one thing is clear: we are in a giant bull market that is now two years old and that is showing no sign of coming to an end. It will not be a straight line up (it never is), but it is a bull market and, in a bull market, you have to stay invested.
Best regards,
Your CaridaB Group Team
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