2024 Mid-Year Market Review Part 2

In this episode of "Protecting and Preserving Wealth," we continue our discussion from our previous episode, starting with interest rates and the Federal Reserve's actions. Bruce notes that the 10-year treasury rate has risen to 4.44%, highlighting the market's control over this rate rather than the Federal Reserve. Despite predictions of a recession, we don't foresee it occurring this year. The Federal Reserve faces pressure to lower interest rates, which impacts the real estate market significantly. Housing prices have remained stable despite fewer sales, contributing to inflation concerns.

Jason points out the delicate balance the Fed must maintain between controlling inflation and supporting economic growth. Interest rates are expected to remain high for an extended period, gradually decreasing over the next few years. We discuss the historical context of interest rates, noting that current rates, though high in the short term, are still relatively low compared to past decades.

The conversation shifts to public versus private equity. Bruce explains that there are fewer than 6,000 publicly listed companies, while private companies number around 6 million. Investing in private equity offers opportunities for growth and diversification, often independent of public market fluctuations. Jason adds that private equity investments can provide significant returns due to their unique growth cycles and management strategies.

We also address the impact of the Federal Reserve's interest rate hikes on the stock market. Despite higher rates, the market has performed well historically during such cycles. As the Fed lowers rates in response to economic conditions, businesses will need to adapt to maintain profitability.

The discussion touches on the current employment landscape, with tech companies laying off employees and shifting work-from-home policies. This belt-tightening reflects broader economic concerns and impacts consumer confidence, which remains lower than pre-COVID levels overall. Political affiliation also influences consumer sentiment, with conservatives generally more pessimistic about the economy at present.  This does track with historical data: the party NOT in the White House tends to have a more pessimistic view of the economy.

We conclude by emphasizing the importance of diversifying investments and the potential of private equity. Bruce remains optimistic about market prospects, especially with the ongoing advancements in AI technology. He encourages listeners to consider these factors in their financial planning.

Disclosure: Investing in alternative investments or private equity may not be suitable for all investors and involves special risks, such as risk associated with leveraging the investment, utilizing complex financial derivatives, adverse market forces, regulatory and tax code changes, and illiquidity. Investors in this asset class are usually required to commit significant capital for years, which is why access to such investments is generally limited to institutions and individuals with high net worth. There is no assurance that the investment objective will be attained.

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at [phone] or their Scottsdale office at [phone].

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures:  https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2025 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast  #