Fisher Investments - This Week In Review (Dec. 27, 2024)

Transcript

Hello and welcome to This Week in Review. This weekly segment is designed to highlight a few things you may have missed this week, what they mean for financial markets, and most importantly, what they mean for investors. Now let's review what happened this week. First U.S. consumer confidence. On Monday, the Conference Board released its December Consumer Confidence survey, which showed a slight decline from November. While that may seem negative, we think it's important to keep this in perspective. Monthly swings in consumer confidence surveys are common, and history shows that they aren't that great at predicting what comes next. Consumer confidence surveys are more like a snapshot of how people are feeling in the moment. Think of it like this. When people answer the survey, their responses often reflect what's already happened in the news or markets. A survey is a timely glimpse into how consumers felt at that moment, but not a crystal ball for projecting future spending. So while it's good to understand where sentiment is at, these surveys aren't necessarily very telling for what lies ahead. Next, the U.S. housing market. This week we got November's new home sales numbers on Tuesday and the Case-Shiller home price data for October on Friday. For many, the housing market feels like a big part of the economy. This is understandable given housing costs often make up one of the biggest expenses in an individual or household budget. But the housing market's role in the overall economy is smaller than you might think. Residential investment, including things like new home construction and remodeling, makes up less than 3.3% of U.S. GDP (gross domestic product) today. Two decades ago, it was closer to 5%, so its economic footprint has even shrunk over that time. Investors have long watched the housing market for signs of recession, but what's interesting is that even when housing dragged on the economy in 2022 and 2023, no recession followed. This shows the broader economy isn't as dependent on housing as it once was. While it's always good to keep an eye on real estate trends, continued economic growth doesn't rest solely or even primarily on the shoulders of the housing market. Finally, a note on year-end portfolio checkups. The end of the year is a time when many investors feel they should review their portfolio strategy and assess performance. It's also important to regularly ensure your portfolio is still aligned with your goals. If you choose to conduct a year-end portfolio performance review, here are a few quick notes to consider. First, make sure you look at the big picture. Instead of focusing on which individual securities did great or which ones did poorly this year, pay attention to how your overall portfolio performed. This has the biggest impact on your long-term returns. Second, stay focused on the long term. Markets delivered solid returns this year, and fully participating in bull market returns is important. However, many investors have time horizons that span multiple decades. It's incredibly important to keep sight of those long-term goals anytime you are feeling particularly greedy or fearful about your investments. Third, don't compare apples to oranges. For example, if your portfolio has a large portion of bonds in it, you shouldn't compare your returns to an all-stock benchmark. Similarly, if you have a globally diversified portfolio, you don't want to compare your portfolio against a single country stock market. And if you don't fully understand why your portfolio strategy is designed the way it is, ask your financial advisor to help review it again with you. And that's it for this week. To learn more about what we're watching, check out our other series, 3 Things You Need to Know This Week, released each Monday. For more information, you can also visit the insights section at FisherInvestments.com. Thanks for joining us and don't forget to subscribe!