Following a strong first quarter, the second quarter of 2024 was more of a mixed bag in the investment markets. The S&P 500 continued to lead the way with a 4% return, leaving it up over 15% for the year. However, US Small-Cap stocks dropped 3%, and REITs fell by about 1%. Outside of the US, developed market stocks were down less than 1%, while emerging market stocks were up almost 5%.
Sometimes, the best decisions are made at the last minute. I am a planner by nature, so it's not often I do something completely spontaneous like this. However, sometimes the best experiences in life are those you haven't planned for, so you have to be willing to trust your gut sometimes. A recent trip to Brooklyn for an Ed Sheeran concert reminded me of this, among other things
Investment markets started the year much the same way they ended 2023. US Large-Cap Stocks led the way again with a 10.6% return in the quarter, with developed market international stocks and US Small-Cap stocks not far behind at 5.8% and 5.2%, respectively. Those three asset classes posted the strongest returns in 2023 as well. Growth stocks continued to outperform Value stocks, though the margin narrowed from last year. Volatility remained quite low in the markets, with the Volatility Index (VIX) at the lowest level since 2017.
On Tuesday, January 23, 2024, I had minimally invasive heart surgery to repair mitral valve prolapse at University of MD, St. Joe's Medical Center (SJMC). I had known for over six years that this would eventually need to be done, but my annual echocardiogram did not indicate any worsening …..until last September. While I still really did not have any symptoms, an echocardiogram and other tests showed the condition had worsened, and it was time to talk to surgeons about options.
In a year where nearly every “expert” predicted a continued decline in the market, almost every area of the stock market posted double-digit positive returns. US Large Cap Growth stocks led the way after suffering the worst losses in 2022, bouncing back with a 47% return. Value stocks lagged badly behind growth stocks but were still up 12% on the year. Even international stocks had a very strong year, with developed market stocks up 18% and emerging market stocks up 12%.
We’ve written about HSAs before, calling them a hidden gem that more people should use to help put away money for retirement. These accounts are “triple tax-advantaged” as contributions are tax-deductible, earnings grow tax-free, and distributions are tax-free as long as they are used for qualified medical expenses. We have many clients who utilize HSAs, and I personally fund my own each year. As we head into the end of the year, I thought it would be helpful to provide a review of HSAs, along with some of the planning tips I picked up from Kelley’s presentation.