20 Dec Market Update: December 20, 2024
Happy Friday! I’m here with a quick but important market update following Wednesday’s 1,100-point drop in the Dow—a move that understandably caused concern for many. My goal today is to offer you some perspective and provide clarity on what’s happening so you can approach these developments with confidence and calm.
First, let’s put that 1,100-point drop into context. While it might sound alarming, it represents only about a 2.5% decline in market value. To give you some perspective, when I began advising in 2001, a drop of this magnitude would have equaled a 10.5% decline in a single day—now, that’s significant. By shifting our focus from raw point movements to percentages, we can reframe these fluctuations and better understand their true impact. Remember, while the headlines might amplify the drama, the reality is often far less alarming.
Second, it’s important to recognize that market volatility around Federal Reserve decision days—and the days that follow—is entirely normal. These moments tend to spark dramatic reactions as the markets digest new information and recalibrate expectations. However, this turbulence is often short-lived. If we look at the past five cycles of similar conditions, we find only one instance of a bear market and no recessions in the subsequent year. This reinforces that what we’re seeing now is likely temporary noise rather than a signal of deeper trouble.
Third, I want to touch on the wave of alarmist narratives you might have encountered on social media. Days like Wednesday often bring out dramatic claims that the market is “crashing” or that you should abandon stocks altogether in favor of alternatives like gold, Bitcoin, or real estate. These voices frequently have an agenda—whether it’s to capture your attention or sell a product. As the saying goes, “If it bleeds, it leads,” and fear-mongering can be a powerful tool for some. My advice? Approach these messages with discernment, focus on the bigger picture, and remember your long-term goals.
Finally, I know there’s been a lot of speculation about how the new administration will influence the economy. While some are optimistic and others are apprehensive, history provides a reassuring perspective: the U.S. economy has proven remarkably resilient over time. Through changes in leadership, market cycles, and global disruptions, American innovation has endured. It has consistently created value for investors and driven progress, and I have no reason to believe this time will be any different.
As we navigate these times, I encourage you to remain informed and engaged. That said, it’s equally important to remember that the day-to-day fluctuations we see in the markets are not reflective of your long-term investment strategy. Your portfolio is carefully designed to withstand these ups and downs. In fact, periods of volatility often present opportunities to buy quality investments at a discount—turning challenges into advantages.
As we close out the year, I want to wish you peace, rest, and joy this holiday season. Let’s look forward to a new year filled with growth, opportunity, and optimism. Together, we’ll continue to navigate these markets with clarity, purpose, and confidence.
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The commentary in this post (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of Angela Wright, an Investment Adviser Representative of Gemmer Asset Management LLC (“GAM”) and should not be regarded as the views of GAM, or a description of advisory services provided by GAM or performance returns of any GAM client. References to securities or market-related performance data are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. The information presented herein may contain links to third-party websites with which we have no affiliation. A link to any third-party website does not mean that we endorse it, or the quality or accuracy of the information presented on it.