Equities posted significant gains during November especially in the US which responded positively to Trump’s election. This was fuelled by optimism around potential economic policies like tax cuts and deregulation. The S&P 500 is up nearly 6% for the month of November – its strongest monthly performance so far this year. The ‘Magnificent Seven’ a group of large cap tech companies are up by 9.5%. These companies including Apple, Microsoft, Amazon, Alphabet, Tesla, Meta and Nvidia have significantly influenced the US stock market in recent years. (performance figures as at Nov 2024).
Some other companies in the US have had negative reactions. A key semi-conductor Index in the US has fallen over the month even though we have seen the broader rally in US equities. Ultimately the market is really trying to tie its reaction with the policies and what they expect them to be!!
European and emerging markets faced declines amid ongoing political challenges. It looks like Germany is facing a general election in February 2025, and France’s Government has been dissolved as it faced a vote of ‘no-confidence’. The French markets have reacted with the CAC 40 stock market index under-performing by 1.50% during November. However Bond markets have performed positively, benefiting from a stable interest rate outlook amidst cautious central bank signals.
There is a lot of optimism in the markets at present but we can never assume that volatility is out of the way! Volatility is a normal part of investing and is to be expected. It is important to stick with your investment strategy and consider the three Cs – Consistency, Conviction and Compounding.
1. Consistency: Regularly contributing to investments, regardless of market conditions, ensures that you’re staying committed to your financial goals. (remember you can’t time the markets – it is time spent in the markets that gives results).
2. Conviction: Having belief in your investment strategy will help you stay you keep calm during market volatility and prevent you from emotional decision making i.e. stick with your plan!
3. Compounding: The power of compounding helps your investments to grow over time. When you remain invested and allow your returns to generate more returns, you benefit from the snowball effect.
As Financial Planners our job is to help you put a personalised plan in place that is aligned with your own goals. Whilst we don’t predict the markets, our aim is to help you navigate the markets with confidence.
Interesting Fact: November 2 years ago we saw the launch of Chat GTB and since that time Nvidia’s stock is up 717% and The Magnificant Seven is up 183%
