Susan Shoemaker and Bob Graham – Riggs Asset Management Company

Susan Shoemaker:
Hi, this is Susan Shoemaker from Riggs Asset Management. I'm talking with Bob Graham, President of Riggs Asset Management, and today we're discussing the outlook for 2024.

We just finished a very positive year in 2023, and once again we’re looking at the charts and trying to determine how the election cycle may impact both the stock and bond markets.

Historically, if you go back to around 1950 and review election years regardless of which party wins, you tend to see a fairly consistent pattern in how the stock market behaves throughout the year.

Bob, maybe we can break that down quarter by quarter.

Bob Graham:
Sure.

If we look at the first quarter of an election year, markets often tend to be somewhat choppy. Between the beginning of the year and roughly the end of March, the market may move up a bit or down a bit, but it often trades sideways.

We actually talked about this in our recent newsletter.

This period can be a good opportunity for investors to evaluate where they want to be positioned and build confidence in their portfolios. That’s very much what we’re focusing on right now.

Susan Shoemaker:
Right. And then when we move into the second quarter, things often begin to stabilize.

Bob Graham:
Exactly.

By that time, the market typically has a clearer sense of who the major candidates are likely to be. Once investors have that information, the market can start assessing potential policies and economic outcomes.

At that point, markets often begin to firm up a bit, and interestingly enough, the summer months during election years tend to be relatively strong.

Susan Shoemaker:
Then as we move closer to the election itself, we often see another shift.

Bob Graham:
Yes. As we approach the election, markets can sometimes pull back again because uncertainty tends to increase.

Investors may become cautious while waiting to see who will ultimately win the election.

However, historically something interesting happens once the election is decided.

Regardless of which party wins, the market tends to rally strongly into the end of the year.

Susan Shoemaker:
So overall, the pattern tends to look something like this:

• Choppy early in the year

• Gradual improvement through the spring and summer

• Possible pullback ahead of the election

• Strong rally toward the end of the year

Bob Graham:
That’s exactly right.

So our expectation for 2024 is that we may see a similar pattern.

The early part of the year may remain somewhat choppy, followed by improvement into late summer. We could then see a pullback as the election approaches, and finally a strong finish to the year once the outcome becomes clear.

Overall, we believe this environment presents opportunities to structure portfolios thoughtfully and take advantage of market movements throughout the year.

Susan Shoemaker:
And really, the key theme here is certainty.

Bob Graham:
Exactly.

By the summer, investors typically know who the candidates will be. After the election, we know who the next president will be.

Once that uncertainty is removed, businesses and investors can move forward with a clearer understanding of the rules of the road.

Companies can make decisions, move ahead with investments, and the markets often respond positively.

So while we’ll have to see exactly how 2024 unfolds, overall I’m pretty optimistic about the outlook.

Susan Shoemaker:
Great. Thanks for that roadmap.

Bob Graham:
Great. Thank you.