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Happy Holidays from Offit Advisors! 🎄🕎❤️
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OA Celebrates 2024 Success and New Partnerships in Los Angeles
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Earlier in the month, our team headed west to Los Angeles, where we celebrated another successful year and spent some time with our partners at Miracle Mile Advisors. While in LA, we got to experience the beautiful weather, and enjoyed some team bonding, learned about new systems, technology, and resources, and had the opportunity to catch up with family and friends living on the West Coast.
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A Look to the Future; Exciting Things are Happening at Offit Advisors in 2025!
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We are really looking forward to 2025! Offit Advisors has some truly special things in store for our clients in the coming year, including out of state trips, a Santa and holiday picture family experience, personal interest events for clients, "Shredding of Documents Day", networking events for clients and referral partners to attend, a seminar and webinar series around estate planning, investment planning, tax planning, medicare planning, cyber security planning, a charitable event, and a car dealership event.
We also plan on delivering our highest quality financial planning yet with some new tools and resources we will roll out in 2025. The best is truly yet to come for our clients, our referral partners, and our team!
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OA Director of Insurance & Investment Operations Barbara Owens is Retiring
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Barbara Owens is retiring at the beginning of February!
We are grateful for Barb's nearly 10 years with our firm, and celebrate her amazing 40 year career in which she served countless clients with care, amazing service, hard work, and genuine relationships. We made a special plaque to celebrate her achievements. Enjoy retirement Barbie!
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As we wrap up the year, please keep the following in mind:
- If you held an investment account at Kestra, you will receive your final year-end account statement and associated tax forms. These are important for your records and tax preparation. We will touch base further about this in February 2025.
- If applicable, your Client Service Associate will reach out in early January to confirm your income and eligibility for Roth contributions for 2025.
- If applicable, your Client Service Associate will also contact you in early January with your Required Minimum Distribution (RMD) amount and to schedule your distributions.
If you have any questions, our team is here to assist you!
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Ben and Amanda Celebrate 11 Years of Marriage!
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Ben and Amanda celebrated their anniversary at a special restaurant they always wanted to go to called L'Auberge Chez Francois in Great Falls Virginia, and it was incredible!
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In November Ben and his wife Amanda celebrated their 11th wedding anniversary! Hard to believe. Below is a comical video they created as a surprise to everyone at their wedding, which took place in Philadelphia. The video was displayed on a big screen like a mini movie before they were first introduced as husband and wife and before their first dance together.
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This playful wedding video from Ben and Amanda's wedding made light of the juxtaposition between Ben's love of food and Amandas love of running. Hope this brings you a laugh!
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Stocks Rally Following Election; Bonds Make Late-Month Gains
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HIGHLIGHTS:
- After stumbling in October, stocks rallied sharply in November, particularly following the election‘s clear outcome, which many had feared would not be the case. Record highs were set across the major U.S. equity indices with even the Russell 2000 hitting its first record high since 2021.
- Yields had surged higher in October and those increases continued in the first part of November. However, the 10-year U.S. Treasury yield declined to close out the month. After closing October at 4.28%, the 10-year U.S. Treasury ended November at 4.18% — down from a 4.44% close on November 13.
- The U.S. economy continued to be resilient. Although the ISM manufacturing index remained below 50 in October, the non-manufacturing index surged to 56, showing ongoing strength in the service sector. The unemployment rate held steady at 4.1%. The U.S. economy continues to expand.
- The FOMC met in early November and cut rates by 25 basis points as expected. The expected pace of rate cuts has slowed with the expected Fed Funds target between 3.75%-4.00% by December 2025. (Per the CME FedWatch tool as of 12/2/24.)
Equity Markets
New all-time highs were achieved for the major U.S. equity indices in November. The Russell 2000 Index even participated, passing its prior high from 2021 after market leading monthly gains. See Table 1 for November 2024, YTD, and calendar year 2023 results.
The broadening of the stock market gains that occurred in the third quarter resumed in November after a brief pause in October. U.S. stocks rallied sharply following the election after a definitive win by President-Elect Trump when many feared the outcome would be much less clear. Small caps, as measured by the Russell 2000 Index, led the charge boosted to a degree by the potential for less regulation and higher tariff expectations, which can benefit smaller, domestic-focused companies. However, the rally was broad-based with all major U.S. equity indices achieving new all-time highs and showing strong year-to-date returns (all U.S. indices tracked on Table 1 are up over 20% so far this year).
International stocks did not fare as well (likely due to the same tariff talk and the strengthening dollar) as both developed and emerging market equities declined. International stocks have clearly underperformed U.S. stocks, but, with some perspective, both of those indices still show gains of around 7.6% year to date, not a disaster by any measure.
Fixed Income
A late-month decline in rates helped push most bond indices into positive territory for the month. After dropping steadily through the third quarter, rates moved up rather sharply in anticipation of the election and continued to move higher through the first part of November. However, the 10-year U.S Treasury yield slid lower late in the month to end November at a lower level (4.18%) than October’s close (4.28%).
Rates and bonds have been volatile over the last couple of months digesting a presidential election, a Fed that will likely slow the pace of rate cuts, and rather strong economic data. See Table 2 for fixed income index returns for November 2024, YTD, and calendar year 2023.
Although the rise in rates in October still had a significant negative impact on year-to-date results for most bond sectors, some of that reversed in November. The more rate sensitive sectors (like 30-year U.S. Treasuries) bounced back the strongest, but still had the worst results year to date. High-yield bonds have been steadier this year as they often follow what is happening with stocks, and they have clearly been the leaders in 2024 for the bond market. (Our tactical fixed income strategy just passed the one-year anniversary of allocating to high-yield, a position we entered in early November 2023 and we continue to maintain that exposure as of this writing.)
At the start of the year, we said we thought the 10-year U.S. Treasury yield would be in a range between 3.25% and 4.5% in 2024 (acknowledging that we got above that level in April). The trend in rates was lower since those April highs, but that reversed in October as rates shot higher, only to decline once again in late November. We believe Fed rate cuts will push interest rates lower, with the most dramatic move being in shorter maturities.
We maintain our long-standing position favoring credit versus pure rate exposure in this interest rate environment, and that has served us well so far in 2024. We also believe the role bonds play in a portfolio, to provide stable cash flow and to help offset the volatility of stocks in the long run, has not changed, despite recent elevated volatility. Furthermore, we believe that bond yields remain attractive, and we are seeing some of the best bond yields in years, especially with the recent increase in rates. In our opinion, having an active bond management approach makes sense in these volatile times.
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S&P 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. You cannot directly invest in the index.
Dow Jones Industrial Average - The Dow Jones Industrial Average is a popular indicator of the stock market based on the average closing prices of 30 active U.S. stocks representative of the overall economy.
NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes approximately 5,000 stocks, more than most other stock market indices. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indices.
Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index which includes the 3,000 largest companies in the U.S., based on market capitalization. As of the latest reconstitution, the average market capitalization was approximately $762.8 million; the median market capitalization was approximately $613.5 million. The largest company in the index had an approximate market capitalization of $2.0 billion and a smallest of 218.4 million.
Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000® Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
Government bonds are guaranteed by the U. S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value.
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Miracle Mile Advisors LLC (“MMA”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where MMA and its representatives are properly licensed or exempt from licensure. The information is illustrative, and is provided for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor. The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur. All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. All investments include a risk of loss that clients should be prepared to bear. The principal risks of MMA's strategies are disclosed in the publicly available Form ADV Part 2A. Past performance shown is not indicative of future results, which could differ substantially. This message is confidential and subject to terms at: https://miraclemileadvisors.com/disclosures/ including on awards/rankings, confidentiality, legal privilege, viruses and monitoring of electronic messages. If you are not the intended recipient, please delete this message and notify the sender immediately. Any unauthorized use is strictly prohibited.
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