As we enter a new year it is a good time to reflect on a few lessons from the year 2024. First, markets can surprise to the upside. It is easy to assume that with stocks surprises are only a bad thing. Entering the year many viewed stocks as overvalued with the economy and inflation potential issues. Instead, the stock market surprised by having another terrific year.
The second lesson is that the technology sector can remain the dominant leader. Valuations for tech seem high and some fear a bubble has been created, but earnings and cash flow keep climbing. With AI, robotics, driverless cars and more we should stay open minded to tech remaining leadership.
The final lesson of 2024 is one mentioned on our recent podcast but is important enough to mention again. Buy quality not just in investing but all aspects of life. Sometimes low-quality stocks can have huge years and be the temporary winners, just like saving a few dollars and buying an inferior product or service can seem like the way to go. However, at some point owning high quality in your financial life and personal life will make for a smoother and better experience. Happy New Year!