December Market Recap
Stocks had another strong year in 2024, with the S&P and Nasdaq notching multiple new highs during the year. Despite the overall strength of the market, December was a bit of a bumpy ride. The Dow Jones Industrial Average (DJIA) endured the longest losing streak in over five decades (peak to trough was 6%) and a Fed-induced sell-off cut the rally since the November election by half.
Remember the Wall Street 2024 targets for the S&P 500? The market has blown past even the most bullish estimates for two consecutive years.
What should we expect in 2025?
Here are some predictions from a slew of Wall Street firms.1
If we’ve learned anything from last year’s projections, it’s that these estimates should be taken with a grain of salt.
What could temporarily derail the market trajectory? One seasoned market commentator warns that 2025 could start with some volatility around headlines from the following:
- potential policy disappointment such as trade and tax policies,
- a possibly slightly slower pace of rate cuts in 2025,
- and geopolitical saber rattling and/or tariff threats.
However, as long as 1) growth remains solid, 2) the Fed is cutting rates and 3) earnings/corporate commentary are both positive, those potential problems are relatively minor and any immediate and temporary volatility should be viewed as a bump along the road in a still-upward-trending market.2
Bigger for 2025!
Many gift tax and estate exclusion limits increased in 2025! These numbers will help you in your gifting and estate planning:
- Annual gift-tax exclusion: $19,000 per recipient (direct payments to medical and educational institutions are exempt)
- Lifetime gift and estate tax exemption: $13.99 million per person ($27.98 million per married couple)
Retirement plan contribution limits are also higher.
2025 Retirement Plan Contribution Limits
| ACCOUNT TYPE | Under 50 | 50 and up | Age 60 to 63 |
|---|---|---|---|
| IRA | $7,000 | $8,000 | same as age 50 and up |
| 401(k)/403(b)/457 | $23,500 | $31,000 | $42,250 |
| SIMPLE IRA | $16,500 | $20,000 | $25,250 |
Note the “additional” catch-up amounts available to people who are 60, 61, 62, and 63 and have a 401(k) or SIMPLE IRA. These amounts are new in 2025.
What are Alternative Investments?
Stocks and bonds have long been regarded as the most common and easily accessible investment vehicles. They need very little introduction. If you own shares of a corporation, you are a shareholder (owner) among millions. Should you buy a bond from a government entity or a corporation, you are a creditor entitled to the promised interest payments and principal payback upon maturity.
However, outside of the traditional investing world, there exists a growing universe of alternative investments. Real estate, private equity, and private credit, to name a few, are some of the categories.
In upcoming blog posts, we will be discussing various types of alternatives investments, their merits and things to consider when evaluating them.
U.S. Stock Market to Close in Honor of Jimmy Carter
The NYSE and Nasdaq will be closed on January 9, 2025, following a long-held Wall Street tradition of honoring our nation’s leaders. The bond market will also close early (2pm ET). President Biden declared the day as a National Day of Mourning for former President Jimmy Carter, who died on December 29, 2024, at the age of 100. Early NYSE records indicate that the first time the exchange closed to honor a deceased President was after the assassination of Abraham Lincoln in 1865. Most recently, it closed in 2018 in honor of the late President George H.W. Bush. U.S. stock and bond markets will resume normal trading hours on Friday, January 10, 2025.
Here’s to 2025!
