November 15, 2024
Michael Landsberg, Chief Investment Officer of Landsberg Bennett Private Wealth Management, provided a comprehensive Q4 2024 market update, reflecting on the election’s decisive outcome and its implications for financial markets.
Landsberg explained how the election spurred institutional buying activity, driving major indices to new highs due to diminished regulatory fears and economic optimism. He highlighted opportunities in sectors such as technology, financials, industrials, and energy while emphasizing the importance of portfolio diversification and tax-loss harvesting as part of year-end planning.
Landsberg also addressed the challenges ahead, including inflationary pressures, elevated interest rates, and policy shifts under the new administration. Despite these headwinds, he remains optimistic about markets for 2025, though he tempered expectations for returns compared to the strong performance in 2024.
Key Takeaways:
Election’s Market Impact:
Landsberg explained that the market reacted strongly to the decisive election outcome, driving stocks to all-time highs. “Institutional investors were forced to cover shorts after underestimating the possibility of a clear Trump victory,” he noted. The result brought relief in the form of reduced regulatory uncertainty and no expected tax increases.
Sector Opportunities: Landsberg highlighted areas poised for growth under the new administration:
Inflation and Interest Rates: Landsberg anticipates inflation to trend higher, reaching 3%-3.5% by mid-2025, fueled by rising commodity prices, shipping costs, and wage pressures. “Inflation has likely bottomed out, and we’re looking at a higher-for-longer interest rate environment,” he stated. He expects the Federal Reserve to pause rate cuts in 2025.
Portfolio Positioning: Landsberg emphasized the importance of rebalancing portfolios to mitigate risks and capture growth. “We focus on earnings acceleration to identify companies that will thrive in a higher inflation and interest rate environment,” he noted. He encouraged allocating funds to inflation-resistant sectors such as financials, technology, and industrials while trimming positions in underperforming areas like healthcare.
Year-End Tax Planning: To optimize tax outcomes, Landsberg’s team actively engages in tax-loss harvesting during November. “We aim to minimize tax liabilities by realizing losses where possible and deferring gains until the following tax year,” he explained, underscoring the importance of planning to preserve client wealth.
Balanced Expectations for 2025: While Landsberg expects markets to continue performing well in 2025, he cautioned that gains may not match the robust returns of 2024. “The enthusiasm following the election has set a high bar, and we don’t anticipate a repeat of this year’s extraordinary performance,” he said.
Landsberg concluded by reaffirming the importance of focusing on earnings growth and diversification as central tenets of his investment strategy. “Markets thrive on certainty, and with a clear path ahead, we believe there are meaningful opportunities for growth,” he remarked. He encouraged clients to remain disciplined, especially as policy shifts and economic variables unfold in the coming year.
Landsberg Bennett is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC (member FINRA and SIPC). Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC.
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