Happy New Year!

As you know, in 2024 we changed our affiliation model.

Any accounts that were not held on our advisory platform were moved to house accounts with our broker/dealer Commonwealth.

We sent an authorization to share form for you to sign to keep the feed coming on those accounts into our database. If you did not sign the form we sent to you we will not be able to see those accounts - we encourage you to do so.

You will be receiving a letter from Commonwealth in the coming days (if you haven’t already) confirming that your account has become a house account. Please let us know if you have any questions.  

2024 was another interesting year. 

The U.S. stock market experienced a robust performance in 2024, with major indices achieving significant gains. The S&P 500 rose by over 23%, marking its best two-year run since 1997-1998. The Nasdaq outperformed, surging by approximately 28.6% during the same period.



This upward trajectory was largely driven by the strong performance of mega-cap technology stocks, particularly those associated with artificial intelligence advancements. The “Magnificent 7” group of stocks, which includes major tech companies, saw gains nearing 67%.

However, most of the market has continued to lag the very top performers in the market with the Russell 2000 index, small US companies, only returning about 10% last year. As rates move down and breadth expands in the market, we will likely see improved performance from the rest of the US equity markets.  

The fourth quarter of 2024 presented challenges for the U.S. bond market. Government bond yields rose sharply, influenced by economic resilience and persistent inflation concerns. The 10-year Treasury yield increased from 3.78% to 4.57% during this period, leading to a decline in bond prices. Consequently, the aggregate fixed income market experienced a negative return of -3.1% in Q4. (Remember that bond yields and bond prices move opposite of each other so this increase in yields caused the decline I mentioned.) Overall, the level of rates should be sloped downward though we can still see volatility in these markets, just like can been seen in the stock market, though generally more muted. 

The last several years, following the pandemic, have continued to show the value in diversification while also highlighting that in normal conditions it is very normal to have some parts of a portfolio moving down or not as rapidly higher, while other parts are moving faster. This return to normality in market conditions following what was about 15 years of basically everything going up in lock step will continue to support having a quality financial plan, updating that plan regularly, and making decisions based upon your goals and values, rather than on the headlines.  

Speaking to the headlines, we certainly have had plenty and will continue to have extreme headlines as we head into the new year and a new administration. While there have been a lot of talking points, there will be a concerted effort in the first 100 days to work towards an extension of the 2018 tax cuts.

Personally, I think that this is going to be a large lift, and we don’t feel that a full extension as is of the cuts is the most likely outcome, but we will see what comes out of Washington. And as there is more clarity and certainty in policy, we will continue to work with you to ensure that you are aligned as best as you can be for any changes that may occur. Change is the only certainty in the world, and something that we will need to continually be aware of and ready to adjust to, if a change is needed.

Inflation expectations for 2025 have been subject to upward revisions, primarily due to concerns over potential tariff implementations by the new U.S. administration. Economists now project core inflation to average around 2.5% in 2025, slightly above the Federal Reserve’s target of 2%. However, the long-term averages have never been in line with the Fed’s stated goal of 2% and the economy and the markets work very well in an inflation environment in the 2.5 to 3 percent range so don’t feel that the inflation rate staying above 2 is something that will directly get in the way of continued strong performance of the US economy. The US jobs market remains strong and is positioned well for continued positive performance in the months and years to come.  

All things in life, and politics, can and will change - we don’t want to make long term decisions based upon short term feelings and events. Personal individualized planning can help yield your best results and will continue to be the core focus of everyone on our team at Midwest Financial Group.

We look forward to talking more as 2025 evolves.



Remember: when in doubt, shut off the TV, throw away the newspaper, unplug the computer, put down the smart phone, and meet with your advisor when questions arise.  

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

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