Vanguard Heads Warn of Below Average Year for Stocks in 2024

Vanguard heads have said that they expect 2024 to be a “below average” year for the stock market. This may come as a surprise to some investors, as the stock market has been on a tear in recent years. However, several factors suggest that the stock market may be due for a pullback in 2024.

One of the biggest concerns is that stock valuations are currently relatively high. This means that there is less room for further upside. Additionally, the Federal Reserve is expected to continue raising interest rates to combat inflation. This could make stocks less attractive to investors, as bonds and other fixed-income investments will become more attractive. Finally, some economists are warning that the US economy could fall into a recession in 2024. This would hurt the stock market, as corporate earnings would likely decline.

Despite these concerns, exchange-traded funds (ETFs) are still a good investment option for most investors. ETFs offer several advantages, including diversification, low fees, and liquidity. Additionally, ETFs can be used to invest in a wide variety of asset classes, including stocks, bonds, and commodities.

If you are considering investing in ETFs in 2024, there are a few things you should keep in mind. First, focus on quality ETFs. Look for ETFs that track broad market indices, such as the S&P 500 or the Dow Jones Industrial Average. Avoid ETFs that track narrow sectors or industries, as these are more likely to be volatile.

Second, invest for the long term. Don’t try to time the market. Instead, focus on investing for the long term and riding out any short-term volatility.

Third, rebalance your portfolio regularly. This means selling some of your winners and buying more of your losers. This will help to reduce your risk and improve your returns over the long term.

Here are some specific ETFs that you may want to consider investing in in 2024:

  • Vanguard S&P 500 ETF (VOO): This ETF tracks the S&P 500 index, which is a basket of the 500 largest publicly traded companies in the United States. VOO is a good way to invest in the overall US stock market.

  • iShares Core Growth ETF (ITCG): This ETF tracks a basket of large-cap growth stocks. Growth stocks are companies that are expected to grow faster than the overall economy. ITCG is a good way to invest in companies that are at the forefront of innovation.

  • iShares Core Value ETF (ITCV): This ETF tracks a basket of large-cap value stocks. Value stocks are companies that are trading for less than their intrinsic value. ITCV is a good way to invest in companies that are undervalued and have the potential to outperform the market over time.

  • Vanguard Total Stock Market ETF (VTI): This ETF tracks the CRSP US Total Market Index, which is a basket of all publicly traded US stocks. VTI is a good way to invest in the entire US stock market, including small-cap stocks.

  • iShares Core US Aggregate Bond ETF (AGG): This ETF tracks the Bloomberg US Aggregate Bond Index, which is a basket of US government bonds and corporate bonds. AGG is a good way to invest in the US bond market and diversify your portfolio away from stocks.

These are just a few examples of ETFs that you may want to consider investing in in 2024. It is important to do your research and choose ETFs that are aligned with your investment goals and risk tolerance.