Good morning friends,
2024 in Review: Lessons from the Market and What’s Ahead for 2025
As 2024 comes to a close, it’s a great time to reflect on what we’ve learned from the markets and to prepare for what’s ahead. This year presented challenges that tested investors’ patience and resolve—but as always, discipline and data-driven decisions proved invaluable.
2024: A Year of Challenges and Opportunity
This year brought plenty of headlines, from the longest streak of declining stocks in decades to sharp spikes in market volatility. Despite the noise, our approach allowed us to navigate these moments effectively and capitalize on opportunities.
1. The Resilience of Weak Breadth
Earlier this year, we saw the S&P 500 endure 14 straight days of more declining stocks than advancing ones—the longest streak in over 30 years. Historically, this type of market behavior often precedes strong rebounds, and 2024 was no exception. Investors who stayed the course were rewarded with a market that rallied sharply in the months following this streak.
2. Volatility Spikes Aren’t the Enemy
In August, we witnessed a significant spike in the VIX (the market’s “fear gauge”), with many wondering if this time would be different. History showed us that big jumps in volatility often lead to calmer markets shortly after. This knowledge allowed us to avoid emotional decision-making and keep our clients on track for their goals.
3. AI: A Game-Changer in Real Time
As we’ve said for the last couple of years, artificial intelligence is reshaping the economy just as the internet did in the 1990s. In 2024, AI-powered companies continued to lead the way, driving new efficiencies, expanding margins, and even creating entirely new industries. Our focus on this trend paid off handsomely, reinforcing our belief in the long-term potential of technological innovation.
2025: Why Precision Will Matter
Looking ahead to 2025, we remain optimistic but recognize that the market environment will be different. Broad market rallies may be harder to come by, and picking the right stocks, sectors, and asset classes will be critical. Here’s what we see:
1. A Slower, More Targeted Market
While we expect economic growth to continue, market returns are unlikely to match the pace of the past two years. Instead of riding the wave of broad gains, success will come from focusing on the right opportunities. This is why we’ll be prioritizing high-quality stocks and sectors poised for growth.
2. The AI Revolution Continues
Artificial intelligence will remain at the center of our strategy. Much like the internet created transformative change in the 1990s, AI has the potential to reshape industries, drive efficiency, and unlock entirely new business models. We believe this will be a defining theme of the decade, and we intend to stay ahead of the curve.
3. Deregulation as a Tailwind
Potential deregulation could create new opportunities, adding fuel to economic growth. We’ll be keeping a close eye on these developments to position our portfolios for maximum advantage.
4. Volatility Will Test Investors
With geopolitical uncertainties and shifts in monetary policy, we expect periods of volatility. But as history has shown us, these moments often present the best opportunities for long-term investors. Staying disciplined and focused will remain our top priority.
Final Thoughts
2024 was a reminder of why patience, discipline, and a clear strategy matter in investing. Our ability to cut through the noise and focus on what truly drives markets allowed us to navigate a challenging year and deliver strong results for our clients.
As we move into 2025, we’re excited to build on this success. By identifying the best opportunities in a more targeted market, we’re confident we can help our clients achieve their goals—even in an environment that demands precision.
Here’s to a new year filled with opportunities, growth, and success.
Happy Holidays,
JC
Jacob R. Craton
President
561.571.1981
RollingWave Capital
Disclaimer
Past performance is not indicative of future results. All investments carry risk, and this is not intended as investment advice. Please consult with a financial professional before making any decisions.