Doug English provides January 2024 ACT Advisors Market Update

Doug English with ACT Advisors, brings you your January 2024 financial update. As we reflect on 2023 and look forward to the new year, it’s clear that last year was a strong one for the markets and, more importantly, for your investment accounts. Let’s dive into the highlights and discuss what you can expect as we move into 2024.

Reflecting on 2023: A Year of Strong Returns

2023 was an exceptional year, with the S&P 500 delivering a tremendous 26% return, largely driven by the tech stocks at the top of the index. The bond market also performed well, yielding about 5.5% for the year. This significant spread between the stock and bond markets—nearly 20%—resulted in a wide range of outcomes depending on your level of risk.

• Aggressive Portfolios: Clients with the most aggressive portfolios saw returns close to 26% for the year, fully capturing the S&P 500’s performance.
• 80% Stock Portfolios: Clients with 80% stock allocations enjoyed returns around 19%.
• Balanced Portfolios: Many of you have balanced portfolios, with 60% stocks, which yielded about 15% for the year.
• Conservative Portfolios: Even our most conservative clients, with 80% bonds, achieved impressive returns of about 11% for 2023.

Overall, it was a very profitable year for all clients, regardless of your risk profile.

December 2023: A Strong Finish

December was another great month, with both the S&P 500 and the bond market moving up by approximately 4%. Most of you saw your accounts increase by around 5% in December alone. One of the most rewarding outcomes in your taxable accounts was the successful tax-loss harvesting strategy we implemented in October. Doug English explains, “For many of you, this eliminated the capital gains you were going to owe last year, resulting in the ultimate outcome where your account balance grew substantially, yet you get to write off a tax deduction from that capital loss.”

This rare and beneficial scenario is not something we expect to continue indefinitely, but it highlights the importance of active management and tax planning in your investment strategy.

Looking Ahead to 2024: Portfolio Strategies and Market Outlook

As we move into 2024, it’s natural to wonder what lies ahead. Historically, election years tend to be positive for the markets, and the so-called “Santa Claus Rally,” which typically includes the last few days of December and the first few days of January, has started on a positive note.

For the stock rotation strategy, we continue to hold the technology-focused ETF, the QQQ, into January, as it has performed well in recent months. While it’s close to triggering a trade, we haven’t made that move just yet. On the bond side, we’ve made a slight adjustment: we sold preferred securities and moved into long-term treasuries as we entered January.

Doug English notes, “We’ll be paying close attention to how the market performs in January, as the first month of the year often sets the tone for the rest of the year. However, we’re always ready to react and make changes to your portfolio based on our research and the momentum in the markets.”

Tax Planning and Client Support

As always, ACT Advisors is here to support you in achieving your financial goals. We encourage you to reach out to us, especially if you have plans to take money out for trips or other expenses this year. We carefully plan the assets you own based on your withdrawal schedule to optimize your portfolio’s performance.

Additionally, we’re here to help with your tax strategies, reduce your insurance costs, and ensure your assets are located in the most efficient places possible. Doug English adds, “Call us. Let us help you. And thank you very much for your business.”