Share This on Twitter   Share This on Facebook

2024 Q4 Newsletter

“And now we welcome the New Year, full of things that have never been.”
– Rainer Maria Rilke

We are happy to report another very successful year in our shared pursuit of your most cherished lifetime goals. As always, our plans and portfolios were driven solely by those goals rather than by our prognostication around the economy or the markets. Naturally, this will continue to be the case in 2025 and beyond.

Before we reflect on the highlights of 2024, let’s take a minute to review our Four Pillars:

Plan Wisely. As long-term, goal-focused, plan-driven investors, we believe that carefully engineered Lifetime Financial Plans give us the highest probability of achieving your long-term goals.

Diversify Broadly. We believe in owning broadly diversified portfolios of the World’s Best Companies throughout our lifetimes and allowing the invisible hand of capitalism to work its magic.

Invest Intelligently. We believe that the economy cannot consistently be forecast, that markets cannot consistently be timed, and that the “best” securities cannot be cherry-picked. Instead, we rely on Nobel Prize winning research that demonstrates overweighting small, value, and profitable securities has historically delivered higher returns.

Ignore the Noise. We believe the only practical way to capture the premium long-term return of equities is to ride out their frequent, sometimes significant, but historically always temporary declines. We do not react to economic or market events. As long as your long-term goals remain unchanged, so will our Plan for achieving them.

That said, here are our reflections on 2024:

  • Powered largely by a very few of the largest technology stocks, the past year was another exceptionally good one for diversified equity investors. As the year came to a close, the market gave evidence of broadening to some extent, which would certainly be welcome.
  • The presidential election results were clear and uncontested. The economic backdrop continued favorable. The job market remained fairly strong, though it showed signs of cooling due to relatively stringent monetary policy. Corporate earnings and dividends reached record highs and are forecast to increase further in 2025.
  • Late in the year, many investors feared that the equity market had gotten ahead of itself, as evidenced by somewhat stretched valuations. However, since valuations have never proven to be a reliable timing tool—any more than anything else has—we encouraged clients to just keep on keeping on with our Plans.
  • Inflation has not gone away, nor, as Fed Chair Powell observed in mid-December, is it going away anytime soon. A frothy market took this statement rather badly—as it should have, in our opinion.
  • And while the fiscal condition of the U.S. government remains undeniably appalling, the consumer is—perhaps surprisingly—in very good shape. The household debt service ratio (debt payments as a percentage of disposable personal income) was near 40-year lows, at 10.1% in the third quarter of 2024.
  • It would be foolish to expect the broad equity market to continue compounding indefinitely at the nearly 16% it’s been producing since the 2009 lows of the Global Financial Crisis. Fortunately, we do not need it to. Our long-term plans assume the hundred-year average annual return of the S&P 500—around 10%—including long stretches both above and below that mean.

We wish all our clients and friends—to us you are both—a healthy, happy, and prosperous 2025. It is a tremendous privilege to serve as your family’s Trusted Advisor, and we cannot thank you enough for being our DEM Spartans. We will be in touch soon to schedule our annual reviews, but as always, feel free to contact us if you’d like our assistance before then.

Happy New Year!

Don Davey
Senior Portfolio Manager
Disciplined Equity Management
Plan Appropriately, Invest Intelligently, Diversify Broadly, Ignore the Noise



2024 Q4 Market Index Returns

Copyright © 2011-2025. All rights reserved. Powered by Pepper Glen.