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Ask an ally: What can investors expect in 2024?

FRANK NEWMAN & BRANDON SHEPHARD   ·   Dec. 11, 2023   ·   3 min read

What we'll cover

  • A 2024 investment outlook

  • Tips for navigating volatility

  • How inflation could impact portfolios

If you have questions about what 2024 will look like for financial markets, you're not alone. Whether you're a first time investor or a seasoned pro, experienced Ally Invest leaders have answers.

We spoke with Ally Invest Director of Portfolio Construction and Due Diligence Frank Newman and Senior Financial Advisor Brandon Shephard for their insights on what to expect in the year ahead.

The election is top of mind for many in 2024. What does that mean for markets?

Our top tip for long-term investors is not to let the news cycle get in your way.

Newman: In the past, election years have tended to experience an increase in volatility leading up to and immediately following election day. Some experts will try to predict how different election outcomes will affect investors, but historically, political battles don't typically have a long-lasting impact on the stock market.

Your goal shouldn't be to time the market, but to have time in the market.

Shephard: Here's how we'd frame it for our clients: Your goal shouldn't be to time the market , but to have time in the market. A long-term investing approach doesn't involve positioning your portfolio based on the news cycle. Don't make any sudden changes based on headlines. Stick to your plan.

How should investors account for volatility?

Shephard: No matter what lies ahead in the new year, you can count on uncertainty. One way to prepare is to incorporate volatility into your plan by building a  diversified portfolio . Don't put all of your eggs in one basket — it's a cliché because it's true.

Newman: And when those  market shifts  happen, don't panic and miss out on the opportunity to put your money to work. This is where consistency matters — if you're in the habit of regularly investing, volatility might not faze you as much. It might even turn out that, when stock prices dropped, it was a good time to buy (if the price is up by the time you're ready to sell, it's like you bought it on sale). Looking at historical data, any losses in these moments are unlikely to have a big impact in the long run, especially if you have a longer time horizon.

Inflation is also giving investors some jitters. What would you say to them?

Newman: Everyone has felt the economic effects of rising prices in recent years. That's likely to continue into the new year. But for investors, the stock market has historically been a good hedge against these moments of inflation because it can provide a financial buffer. Inflation is one of the reasons you should consider investing.

Shephard: If you're retired or close to retirement, it can get a little trickier because you have less time to wait out inflation. But with a diversified portfolio, you can still confidently weather inflation no matter where you are in your investment journey.

What should investors do with retirement contributions at the start of the year?

Newman: First, check for any changes in contribution limits for your retirement accounts. In 2024, the IRS will increase the amount individuals can contribute to their 401(k) to $23,000 (up from $22,500 for 2023). The maximum contribution to an IRA will be $7,000 (up from $6,500 for 2023).

Shephard: If you have access to a retirement account through your employer, now is a good time to confirm your contribution match opportunities. If you're able, contribute at least enough to earn the match. To go a step further, consider  maxing out your 401(k) , if you have one.

The million-dollar question: When is the best time to invest?

Shephard: Easy: As soon as possible. The longer you give yourself to compound your investments, the better off you'll typically be. If you're anxious about investing, an approach like  dollar-cost averaging  is a good place to start. This strategy allows you to automate your investments and automatically make regular contributions. But it's not the only way to get into the markets. Find the approach that works for you and your financial goals. Remember, you miss 100% of the shots you don't take.

Any last words for investors in 2024?

Newman: Investing is a marathon, not a sprint. Whether you're investing for your retirement, your kid's education, your future home or something else, don't set your sights on making a fortune overnight. Instead, aim to build wealth over time. And you don't have to do it on your own, our advisors are here to help. The Ally Invest  Personal Advice approach can help you keep your long-term investing goals in mind as you navigate the stock market.

Frank Newman, CFA is the director of portfolio construction and due diligence at Ally Invest. He is responsible for constructing goal-based portfolios tailored to clients' unique needs and situations to help grow their wealth and navigate challenging market conditions with diversified and customized investment portfolios. Frank has a passion for educating investors to help them stay the course with a long-term investment process and ultimately achieve their financial objectives.

Brandon Shephard is a senior financial advisor for Ally Invest, where he is responsible for helping clients understand their financial choices and strategize how to achieve their goals. He has dedicated his career to educating clients on ways to pursue their goals and be consistent with their finances.

Brandon has experience as an insurance policy analyst with Wells Fargo and over 8 years of experience as a financial advisor/consultant with Wells Fargo and TIAA. He also has his Series 66 and Series 7 certification from the Financial Industry Regulatory Authority (FINRA). 

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Frank Newman, CFA
Portfolio Manager, Ally Invest

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