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The recently played Super Bowl will go down as one of the most exciting finishes ever, as the KC Chiefs pulled out an overtime victory.  Andy Reid, the future Hall of Fame coach of the Chiefs, did what he does best, and what the greatest coaches do best, and that was to make adjustments at halftime.  Many people will consider getting a financial plan, to help map out their financial future.  Instead of a financial plan, we try to look at it as financial planning, meaning that life will throw us many changes, curve balls, and situations that may require halftime adjustments.  Speaking of Super Bowls, “Just because you made a good plan, doesn’t mean that’s what’s going to happen.” -Taylor Swift

A record high in the S&P 500 was made on January 2, 2022 and now, just over two years later, we are making record highs on a daily basis.  Here are three takeaways…One, the S&P has now made up for the viscous declines of 2022.  Secondly, an interesting stat that comes from Ned Davis Research (thanks to our friends at Riverfront and JPMorgan) shows that making new highs after at least a one year time period, have historically resulted in positive performance over the next 3, 6, and 12 month periods.  Finally, with the expectation of future rate cuts from the Fed in 2024, has there been other times when the Fed cut rates while stocks were making new all-time highs?  2024 is off and running

A common investment theme around here is that “savings and innovation equal economic opportunity”.  The 2023 market certainly benefited from that view even though an MIT study had previously indicated that innovations are less likely to trigger economic growth because the big ideas are harder to find.  With two letters, AI, innovative new technology arguably single handily carried the market through the first three quarters of last year.  After pausing in October, the rest of the year was led by medical innovations, most notably in weight loss and to a lesser extent Alzheimer’s.  As we look to 2024 and beyond, the future remains bright for innovative solutions to the world’s most vexing issues.  Hopefully, potential gains on Wall Street may follow.

We don’t know what AI is going to unleash in the future but in 2023 it saved the day.  After a disastrous prior year, when the Fed began their interest rate hikes to the sea, excitement on Wall Street over AI has lifted tech stocks and the major averages.  At the end of October though, the “magnificent seven” accounted for most or all of the gains for stocks.  Then in early December, the Fed finally abruptly pivoted, rates went from 5% to less than 4%, and the markets broadly took off across the board.  Instead of a Santa Claus rally, we can call this the Santa Claus Pivot.  Enjoy the holiday season!

Next time you are shopping for a birthday card, look at the lowest level of the rack.  There you will find birthday cards for 100-year-olds.  Think about it, birthday cards commemorating that huge milestone.  In fact, ages 85 and older is considered the fastest growing segment of the US population by percentage, and those over 65 should double in number in less than 20 years.  For investors, the idea of retiring and going completely into bonds is probably a risky strategy, when confronted with inflation.  Stocks and growth assets may then be a bigger part of portfolios for a much longer period of time.  Speaking of time, the best time to invest is today, releasing the exponential compounding to do its thing.  Thanks to First Trust for the birthday wishes, even if they are jumping the gun.