There’s an important message here about not overreacting during a downturn—it could be a momentary blip in an otherwise upward climb for the markets. In fact, the Russell 3000 had an intrayear decline of at least 10% in 25 out of 45 years since 1979. In 17 of those 25, the index ended up for the year!
How long can the bull market endure, and which way will inflation, and interest rates, go? Will the surge for AI-associated companies continue? Will global hostilities in the Middle East and Ukraine ease or increase? Will the US election bring a big November stock swing? (Spoiler: It usually hasn’t.) We’ll find out eventually, by the time the answers are also incorporated in market prices. Until then, 2024—like every year—is a good one for having a long-term plan and sticking with it.
Eventually, we may reach a point where, like the internet, it’s hard to fathom a time before broad AI usage. That means investors don’t need a narrow sector fund or concentration in a handful of stocks to capture AI-fueled gains. A broadly diversified portfolio is likely to capture what many view as a sea change event in progress.