An Ignoble Experiment: Your Crystal Ball Predictions for 2024

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By Josh Katzowitz, WCI Content Director

Last week, we brought to you the results of the 2023 crystal ball predictions we made in early January. Some predictions were actually spot on; some looked foolish with 11 months of hindsight.

I didn't think the stock market would reach its all-time high, but that's exactly what happened in December. I thought crypto would continue to tank, but Bitcoin proved me wrong by increasing by more than 100%.

Either way, it's always a blast to predict what's to come and then look back at the end of the year and laugh at everything we didn't know. After all, one of the mantras on this site that I've probably read a hundred times is: "My crystal ball is cloudy, but . . ."

Well, forget all of that. Today, we're going to peer into our crystal ball for 2024 just for the heck of it.

Entering the new year, the stock market seems bursting with optimism, and the potential of AI continues to excite people (who somehow aren't scared that robots one day might take over the world and destroy the human race). Some people still believe the US is headed for a recession, and apparently, many voters aren't happy with the way President Biden has handled the economy. I guess we'll see what happens in the November elections. Thanks to rising mortgage rates, the housing market and real estate investing seem shaky, but inflation has dropped considerably in the past couple of years.

Now, let's have some fun.

I've gathered predictions from some of our readers, our columnists, and other financial experts to make 2024 crystal ball predictions when it comes to finances, investing, or anything related to money. I didn't care if the prediction was obvious or outlandish, funny or fiendish. I just wanted to know what people are prophesizing.

At the end of the year, we'll revisit this column and see if any of these predictions actually came true. For now, let's look into the cloudiness and see if we can find anything that's remotely clear. Here's what these predictors are predicting.

Financial Predictions for 2024

WCI Columnist Rikki Racela:

Growth stocks will continue to outperform value.
The US stock market will continue to see new highs.
The US will continue to outperform the rest of the world.
Inflation will come back to its 2% target.
The Fed will cut interest rates.

2024 crystal ball predictoins

Reader Howard Zan, an interventional radiologist from Oklahoma:

The federal, mortgage, and Treasury rates will go down but not to the level of 2021.
The S&P 500 will go up, probably within 5%-10%.
Value stocks beat growth this year.
2024 may be a year for dividend investing. Personally, I began investing in SCHD to beef up my value portion of the portfolio.
International will lag US stocks again but not to a large extent. Personally, I hope my international portion could exceed 6.5% of my entire portfolio.

Analyst and writer Ben Carlson:

I'm bullish on consumer sentiment.

Falling gas prices
Falling mortgage rates
The inflation rate is stabilizing
We're seeing real wage growth
The Fed is probably gonna cut rates

Comeback time.

WCI commenter AZRAD

The Fed starts to drop rates next year leading to the real estate market continuing to go up in price with low inventory.
Provided it holds with the same candidates, if Trump is convicted of one of the major crimes, he loses the election. If he doesn't (likely because they are delayed), then he beats Biden. This is not meant to be an endorsement either way.
BTC continues its strong performance, up 50%-100%.
The stock market will be lower than the end of 2023 but by less than 5%.

Forbes

Digital currencies and cryptocurrencies are firmly back on the radar of financial services in 2024. Over 130 countries are reported to be investigating the use or adoption of central bank digital currencies (CBDCs), while Bitcoin's recovery from its 2021 crash is attracting renewed interest from innovators and investors. Of course, outside of CBDCs, the crypto-space is still a Wild West, so we can also expect further movement toward governance and regulation of those who do business there.

[Editor's Note: For the record, people have been talking about regulations for crypto for years, and not much has been done about it. Congress, at this point, seems deadlocked on the issue.]

WCI commenter Steven Corwin, MD

Commercial real estate makes a comeback as companies put an end to remote working.
First-time home buyers are still stuck renting as interest rates remain around 7%, and there is no inventory, keeping prices too high for them to afford.
S&P 500 is up 6% for the year.
Electric vehicle sales decrease as incentives are phased out.

Marketwatch

The S&P 500 index is set to rally to 5,200 by the end of 2024, implying a nearly 13% gain from its current level, according to strategists at Oppenheimer Asset Management, who join a rush of Wall Street analysts expecting all-time highs for US stocks next year.

"We look for 2024 to be a year of transition as markets navigate what we expect will be the Fed's pivot from a restrictive monetary policy setting to an easier stance," said strategists led by John Stoltzfus, chief investment strategist and managing director at Oppenheimer.

[Editor's Note: Note that, as of December 27, the S&P 500 index sat at 4,781.]

WCI commenter JLo

My prediction for 2024 is that there will be days the market is up and days it is down. There will be events that affect the short-term market that no one can predict although some will take credit for nailing it while others will explain away in hindsight why they missed.

[Editor's Note: I can already tell you that this prediction will 100% come true.]

Vox.com

The US economy is not out of the woods. We haven't yet reached that coveted 'soft landing,' where inflation gets back to the Fed's 2% target without tipping the economy into recession. That outcome does seem possible—I'm not saying it's going to happen, but there's some room for optimism.

The stock market is feeling really excited about the year ahead—arguably, maybe a little too excited.

Predictions obviously can be wrong—again, see 2023—but many economists feel quite positive looking ahead. Goldman Sachs sees just 15% odds of a recession over the next 12 months and thinks the economy is on its 'final descent' to a soft landing. Bank of America is making a similar call. The Fed likes what it's seeing and is hoping for more of it in 2024. It's anticipating three interest rate cuts next year.

Financial analyst Jeremy Grantham:

[Editor's Note: This well-known economic forecaster isn't quite as bullish on the US stock market. In fact, he said he would avoid buying US stocks, because, as he told Business Insider, they're due for a downfall.]

"I wouldn't invest in the US, and the fact that I have said that for the last two years, and it's been brutally wrong, merely makes me more convinced because the gap between the valuations between the US and the rest of the world has become unprecedented," he said.

Financial writer Nick Maggiulli

[Editor's Note: Considering the stock market is up about 20% in 2023, he sees that momentum continuing into 2024.]

The average one-year return following a big up year is 11% compared with just 7% in all other years. Though this difference is not statistically significant at the 5% level, it suggests that market momentum isn't a complete fluke . . . Unfortunately, these kind of upward trends don't last forever. If we were to plot the return distributions over the next five years following a big up year (against all other years), we would see that any sort of short-term momentum seems to have faded away . . .

This is my expectation for 2024 (and beyond). Markets will move upward until some catalyst knocks them off track. In 2008, this catalyst was defaulting mortgages that led to a financial crisis. In 2020, it was the COVID-19 pandemic. And, in 2022, it was investors waking up to the high valuations of 2021.

What will cause the next market decline? I have no clue. It could be a geopolitical event, a climate catastrophe, or another supply chain crisis. But, whatever it is, it will be unpredictable ahead of time. If it weren't, then the market would already be pricing it in.

WCI Founder Dr. Jim Dahle

Given the demonstration last year of my extremely limited ability to predict the future (I managed to get four out of six predictions right), I'm not sure why anyone would care about my predictions for 2024. But here they are in order of how strongly I feel about them:

The Fed will make two or three 0.25% cuts in short-term interest rates.
Inflation will continue to be moderate, in the 3% range.
The yield curve will no longer be inverted, although it will still not be very steep at year's end.
The general election will be Trump vs. Biden, and Biden will win for more or less the same reasons he won in 2020—that he isn't Donald Trump and there are too many moderates who are not willing to vote for Donald Trump. The GOP will STILL look to Trump for leadership afterward.
The US stock market will have a good year with returns of at least 5%.
Numerous real estate syndicators will run into cash flow problems as mortgages reset at now higher rates, hindering the returns of multi-family real estate but providing opportunities for those with positive cash flow.
Bitcoin will surpass its previous high and potentially even $100,000, and there will be people piling into it chasing performance again like the beginning of 2021.
There will be a lot fewer "100% stock" threads on internet forums, as bonds generally perform well.
Warren Buffett will pass away unexpectedly, precipitating a relatively brief but significant drop in the value of Berkshire Hathaway.
Twitter will nearly go out of business and require a massive infusion of cash to stay viable as a pet project of Elon Musk.

As always, though, be aware of the predictions from those who try to make money on making the predictions and who make the same predictions over and over again but whose predictions often turn out to be completely wrong.

Just gonna leave this here pic.twitter.com/sEAbsJoNsX

— Nick Maggiulli (@dollarsanddata) December 11, 2023

And . . .

Maybe one of these times he'll be right https://t.co/my4N9rjmsP pic.twitter.com/bTSMM1kH2C

— Inverse Cramer (Not Jim Cramer) (@CramerTracker) December 11, 2023

Money Song of the Week

When Frank Crumit recorded the song "A Tale of the Ticker" in 1929, he didn't know just how prophetic that tune would become soon after. That's because "A Take of the Ticker" satirizes the stock market and talks about how it's all so confusing to Crumit, and even though the US economy was booming at the time Crumit's tune was released, the stock market was soon to become a disaster.

But even back nearly 100 years ago, there was an idea to be wary of stockbrokers and financial advisor types. As Crumit sings,

"Oh the market's not so good today/Your stocks look kind of sick/In fact they all drop down a point/Each time the tickers tick.

"We'll have to have more margin now/There isn't any doubt/So you better dash with a load of cash/Or we'll have to sell you out."

The song was meant to be humorous, but it turned out not quite so funny when the stock market crashed in October 1929, the first step toward the Great Depression.

Crumit, a comedic singer and a vaudevillian, was apparently one of the biggest stars of early radio, but there isn't a ton of information on him on the internet. Which just goes to show that fame (and, ahem, your money in the stock market) can be fleeting and completely lost only a generation or two after you've crooned your last song or made your last trade.

Tweet of the Week

If everyone agreed to drive my dream car, a Honda Accord, we could bring inflation down in this country

Instead everyone buys a $60k truck pic.twitter.com/Hp6pCx4rQx

— Ben Carlson (@awealthofcs) November 15, 2023

Or a $50,000 Tesla.

What are your 2024 predictions? Do you agree with any of the above predictions? Or is everybody just simply wrong? Comment below!

[Editor's Note: For comments, complaints, suggestions, or plaudits, email Josh Katzowitz at content@whitecoatinvestor.com.]

The post Your Crystal Ball Predictions for 2024 appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.

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