"May you live in interesting times," often referred to as the Chinese curse, is reputed to be the English translation of an ancient Chinese proverb and curse. As you navigate your personal finances in 2024 and beyond, you may feel like you're living in those "interesting times."
If you aren’t a baseball fan, you might not know what the trade deadline is. However, die-hard baseball fans agonize over this day at the end of July every year. It’s the last day of the baseball season when teams can trade players without first passing them through waivers. After this date, if you want to make a trade, you first have to put the player on waivers so any team in the league can claim them. The fan reactions to the deadline are an interesting case study in human behavior, and I can’t help but think about the parallels to the world of personal finance. We often see many of the same emotional reactions to what’s going on in the markets. Here are some of the reactions I see most in both worlds.
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.