Forecast 2024: Where Stocks, Rates and Housing are Headed

Published Dec 27, 2023, 10:00 AM


In this episode, we predict what will happen to your money in 2024.

Israel…Ukraine…a presidential election…inflation…possible recession. A lot is going on that could affect the global economy, as well as your personal economy.

It's always dangerous to make predictions, but we're going to do it anyway, as we have for decades here at Money Talks News.

Today, we will focus on three main areas: The stock market, the housing market, and interest rates.

More than likely, you've got a dog in at least one of these fights, right? So, in addition to predicting what's ahead, we're going to make suggestions on what you should be doing now to prepare.

 

Host Stacy Johnson is joined by financial journalist Miranda Marquit. Listening in and sometimes contributing is producer Aaron Freeman. This week our special guest is Marc Lieberman, the founder of Shorepine Wealth Management. Friend of the show, Pam Krueger from Wealthramp, is also joining us to talk about what's next.

Before you listen, remember: This isn't financial advice. So make sure to do your own research and consult your own experts before acting on anything you learn here.

You can listen to the podcast wherever you get your podcasts:

2024 money forecast

Are you ready for 2024? What do you think is coming? Our panelists share what they think will happen in various parts of the market—and why.

First of all, take a look at what some of the experts are saying from around the web:

And what about our own predictions from past years at Money Talks News? Compare our past performance and check out some other information on the 2024 money forecast:

Position your finances for a better 2024

As you prepare for the coming year, you can take steps now and early in the new year to set yourself up for better financial success.

 

Meet this week's guest, Marc Lieberman

Marc Lieberman is the founder of Shorepine Wealth Management, a fee-only financial advisor based in Tiburon, CA serving clients across the country. Marc has spent more than 20 years in the investment industry. He embodies a unique combination of skills that includes managing portfolios ranging in size from less than $1 Million to over $600 Million As a fee-only, fiduciary, and independent financial advisor, Marc Lieberman is never paid a commission of any kind, and has a legal obligation to provide unbiased and trustworthy financial advice.

Meet this week's guest, Pam Krueger

Pam Krueger is a recognized investor advocate and award-winning personal finance journalist and author. She is the founder and CEO of Wealthramp, an advisor-matching platform that connects consumers with rigorously vetted and qualified fee-only financial advisors. It is the only advisor referral service that gives people full control over when and how they talk to their referred advisors.

Her perspectives on personal finance regularly appear in Marketwatch, Forbes, PBS Next Avenue, and she is a frequent speaker on fiduciary financial advice. In addition, Pam is an active volunteer member of the Retirement Income Committee at the Defined Contribution Institutional Investment Association (DCIIA), a non-profit dedicated to enhancing the retirement security of America's workers. She has also served on the California Jump$tart Coalition, an organization dedicated to increasing financial literacy among children and teens, where she created one of their most successful curricula available for K-12 teachers called, Investing Pays Off For Kids.

Each year, she spends part of her time in San Francisco, California and lives in Cape Cod, Massachusetts.

 

 

 

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About the hosts

Stacy Johnson founded Money Talks News in 1991. He's a CPA, and he has also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Miranda Marquit, MBA, is a financial expert, writer and speaker. She's been covering personal finance and investing topics for almost 20 years. When not writing and podcasting, she enjoys travel, reading and the outdoors.

Hey guys and welcome to Money Talks News, the podcast in this episode. We're predicting what's going to happen to your money in 2024 Israel Ukraine, a presidential election, inflation, possible recession. There's a lot going on that could affect the global economy as well as your personal economy. It's always dangerous to make predictions, but we're gonna do it anyway. As we have for decades here at Money Talks news. Today, we're gonna focus on three main areas, the stock market,

housing market and interest rates and more than likely you've got a dog in at least one of these fights, right. So in addition to predicting what's ahead, we're also gonna make suggestions on what you should be doing now to prepare for that. I'm Stacy Johnson. As usual. My co-host will be financial journalist, Miranda Mart. Hello, Miranda. I missed you.

Hey, Stacy,

I'm excited to start this year off right with all of our wrong predictions. Let's do this. They are not

going to be wrong listening in and sometimes contributing is our producer and novice investor, Aaron Freeman. Hello, Aaron. I just stopped predicting. I'm done.

I don't blame you. We've also got a couple of guests here with us today. The first is Mark Lieberman C FA, an independent advisor with Shore Pine Wealth Management. Welcome to the show. Mark. Thank you guys. Very excited to be here. Thanks for having me. You're you're quite welcome. And we also have friend of the show, Pam Kruger who just will not get off of our airwaves. She's with us all the time. Hey, Pam. Hi,

Pam. Is, is from Wealth Ramp and what she does is hook people up with people like Mark. So anyway, more on that later, but as we start the show, remember this, we do not give you financial advice. Why? Because we don't know you. So we can't do that. So make sure to do your own research and consult your own experts before acting on anything you learn here. And now guys, we can't be sued. Let's dive in. Ok, let's start with the stock market.

Mark. I know exactly what the stock market's gonna do in 2024 but I wanna know what you think.

Yeah. Um and I'd love for you to tell me exactly what it's good for. Um, now I see a market right now that still has a lot of uh access from the pandemic liquidity that we all got um, to get to work off. And I think that that's gonna come out in earnings. Um, and you know, as we all know, earnings is what really drives the stock market. Um, you know, you look at just fourth quarter earnings,

you know, at the beginning of September, people are calling for about an 8% growth in fourth quarter earnings now that we're almost through the fourth quarter, it looks like it's coming in at about 3%. So I think that that's gonna be what you're gonna see for most of, uh, 2024 is expectations a little bit above where reality is. Um, you still have some job losses to be taken out with, uh,

you know, the pandemic era, I call it the pandemic era of fattening of our corporations. Um, they, they have to slim up a little bit and so you're gonna see some job losses and you're gonna start seeing a little bit of a cutback in earnings that does not denote, you know, we're going into this terrible linear recession where you're gonna

start seeing, you know, everybody and your brother losing their jobs and people on the street trying to sell apples. Um, but you certainly are gonna start seeing corporations cutting people cut back on spending and, um, recession like environment is what I'm calling it. Um, not full blown recession but, you know, a light recession uh,

during 2024 that doesn't mean the market can't grow through that. Um So what I'm thinking is you're gonna see somewhere between a 0 to 5% growth. You know, if we're on 4700, around 4700 on the S and P 500 right now, you know, maybe you see 5000 by the end of 2024

but you might see it go well below 4500 before it gets there. Um So volatility, a lot of uh excesses still to work off. Uh, but, you know, corporations are strong. The magnificent seven stocks have wonderful balance sheets and, you know, I think the US economy can weather the storm, uh whatever that storm may be.

So you're looking at now, we're at 4700. And by the way, folks, uh for those listening, we're recording this on December the 14th of 2023 we usually do stuff that's evergreen, but this, obviously, we're gonna tell you where we're at. Um And so we're the S and P 500 is at 4700 approximately.

Um Now Mark's calling for 5000, which would be 8% 7 78% 6%. Ok. Now I'm gonna do what I always do, which is try to make people uncomfortable. And I'm gonna ask everybody here. Let me say this too. Um I was looking at notes before this podcast. The most bearish Wall Street S and P forecast I could find was from JP Morgan. And that, and they said end of 24 it's 4200

on the S and P 500. That's 300 points less than we are right now in December of 2023 the highest forecast I saw was capital economics at 5500. So that would be a huge gain from where we are now, almost 1000 points, 800 points. So now let's go around and talk to our Panelist and everybody's gonna take a stab at where they think that S and P 500 is going to be on December 31st, 2024 Aaron. We're gonna go alphabetically.

You've got two A's at the first beginning of your name. I actually just recently watched Jamie Dimond. Uh So I think I'm gonna go with him because this guy, you know, banks the world and he's got some insights. So I'm going with him 42. 0, ok. Now, you don't have to pick one of these two things. You can pick anything in between two, but you think the market's gonna fall this year? Yeah. Yeah, there's to me Magnificent seven here. The only thing that's held it up and now I notice today

if you look at the heat map of the stock market, the mag seven are down and now all the other little guys are green. So it's, everybody's just playing a game.

Ok. Aaron's not a big stock guy.

I'm so impressed. Ok, Miranda, you're next alphabetically. Where's the market going to end

up? So, I mean, I'm not gonna, well, I mean, gosh, I hate this because the thing is, is, you know, we, we've been kind of due for a better correction. I don't really count the 2020 stuff due to COVID as a true, like correction for the market or a true crash for the market because it was over pretty quick. It was kind of a blippy blip. And then,

um, you know, and 2022 was, was a little bit bleak. 2022 was a little bit bleak, but here's the thing. So as of December 11th, uh the S and P 500 was up right around 20% on the year.

And if you look historically speaking, um the, the year before an election year, um is, you know, the S and P 500 has usually a 17% average gain in the year prior to an election. And that's according to us news and World Report. And then they're also saying that like

during, since 1952 during a US presidential election year, you're seeing a 7% gain in the market. So, uh so you're looking at this, you're going ok. So if we go with historical predictions, then we should be seeing a gain in the market. But also if we're looking at the fact that, um you know, we've been due for like a real crash, I personally think for a while and we haven't really had a true, you know, sustained downturn for a hot minute.

But you know, us monetary policy is entirely focused on propping up the stock market. So who knows when we'll have a downturn because, because even though we probably should, according to economic cycle theories, like our entire monetary policy, nobody wants to have a market crash during a presidential year. Guys, nobody, nobody wants to be responsible for that. And us monetary policy often reflects

that. Now, now here's something I used to say. When I did television news,

you didn't answer my damn question. Where do you, where do you think the S and P five?

I don't know. I never know because whatever I think is going to happen never does. I, I'm waiting for a real crash. I am waiting for this mother to like drop below 4000,

just say 4700.

And let's say

I might jump in here, Miranda

Mark, save me, Mark. I'm not gonna,

I'm not gonna save you, but to your point, you know, I think the market agrees with your assessment that the Federal Reserve is gung ho on keeping this market up. You know, when, when the Federal Reserve came out yesterday and talked about, you know, change one word in their, their statement to, you know, now about how things are gonna look in the dot Plot

change to include, you know, potentially three rate cuts in 2024. Um If you looked at the futures, the futures immediately called, you know, and those three rate cuts were rate cuts were 75 basis points. Um, the fed futures immediately called for 100 and 40 basis points of rate cuts. So the market is ahead of the fed in saying this fed is going to do everything it takes to keep this market afloat.

Yeah, by the way, let me intercede here and tell you guys a little story um every year for 15 years as a television news reporter about this time of year and Aaron was with me for the last 10 or so. Right, Aaron, we'd go out and stand on a street corner and stop. Whoever would stop and say, what do you think's gonna happen to stocks, housing and interest rates? Next year? We did that. I did it every year for 15 years and Aaron and I did it together for probably 10

and just so, you know, oh, and we would, we would also say we would also compare that with Wall Street experts. People who get paid millions of dollars to go on television and make the same predictions. Now, let me ask you guys something who do you think was closer? The experts or the people on the street

100% the people on the street.

And the truth is Mark, it was both, I mean, sometimes the experts were gonna be better, but I can tell you right now, if you can go on C NBC right now and you can say the stock market's gonna go up 8% next year because I tell you, I'll tell you. That's exactly what experts do every single year. No, no exceptions. And so anyway, we have, we have short memories. Ok. So I'll, I'll pop in really quick and I'm gonna make my answer really short stock markets, stock market.

I say up slightly. But are we talking about literally like December 31st 2024? Because you know what's gonna happen? You can't say what's it gonna do next year? Well, of course, it's gonna be all over the map. Of course, it's gonna be literally December 30. Was I not clear on my instructions, December 31st, 2024 31st. We will reconvene only to find that I am right,

which is the stock market will be up 5%. So that's about, that's pretty much not far from what Mark said, just slightly. There's no reason for it to be any in my mind. There's no reason for it to end up in any other zone.

Ok. Well, I mean, these are like milk toast responses but you know, the truth is that I, I don't disagree with any of you guys either though. I, I think that we will have a lower market in the, in the first part of 2024 and, and it'll probably go back up, you know, and be a little higher at the end of next year. How, but you know what?

That is literally the consensus, not, not just among us, but among every, among the people on TV, the prognosticators. And so, you know what, that almost guarantees you that that's not what's gonna happen. We're gonna be wrong. Yeah. Well, we all know the stock market does whatever it needs to do to make the most number of people wrong and it's been doing that forever. It does do it. So. Well, the part, it is the real interesting one for 2024.

Yeah, we can divert there. Well, actually let's do this, let's do this. Let's go ahead and go through because let's talk about interest rates because that also that's kind of, you know, what influences bonds, but let's talk about interest rates.

Now, what do you think is going to happen with interest rates? Let's be, let me set the stage right now. We are at five, the, the Federal Reserve sets, um, the sets short term interest rates and right now their benchmark short term rate is at 5.25 to 5.5%. And that's a 22 year high.

Ok. Now, what's gonna happen next with interest rates are interest rates gonna go up down or sideways next year mark?

Yeah. So I know, uh, uh, while the Federal Reserve is very cognizant of what the stock market is doing, I think they also understand very well that the real estate market

really drives a large, large portion of our economy. And so when I talk about this coming recession, if you wanna call it recession, like whatever it may turn out to be, it's really kind of a rolling recession where different parts of the economy will be experiencing recession, like environments throughout the next year to year and a half. And what I'm thinking, uh, that is gonna happen is that, yeah, the Federal Reserve is going to bring rates back to a more

normalized level once they start seeing inflation continue to tame or at least stay, I don't think they're getting to their 2% target, but, you know, at 2.5% they can start cutting rates, right. And, and putting some more liquidity back in the environment out there so that you don't have a 30 year mortgage rate at 7.3% like you do today at 7.3%. Uh on the mortgage rate, nothing is gonna trade.

Um, you know, at 6% you might start getting some movement in the market and, and unlock that market a little bit so that the economy remains healthy. And I think that's where they're targeting things. So I think they drive rates down maybe towards the second half of the year. Uh

um maybe one cut, two cut, possibly three cuts. I don't think we get 1.5% cut off of the, the rate more like maybe 75 basis points to 1%. Um And so you're gonna see rates slightly lower. Um, you know, in the market than you see today.

Ok. So let, let, let me go ahead and rephrase right now. Let's call it 5.5% is where fed funds rate is. Ok. At the end of next year, you're saying 4.5, 4 and three quarters, don't worry around. Sure. Ok. And that's actually what I think too and what I'm reading. Uh, ok, let's, let's again, go around the horn, Aaron.

Uh Yeah, I have to agree with that. Uh It's already on that downtrend. Yeah. So if everything plays out and, and what isn't housing like 30% of, you know, of the fed at least. Yeah. So, yeah, I think it's very important and I thought the fed was not supposed to give a crap about what's happening in the stock market

and, and actually I, I actually was gonna call, call you out on that mark because theoretically the fed is all about two things keeping inflation under uh under wraps and also uh employment, keeping employment high and inflation low. That's their mandate. Now, I, I don't think that their influence why, what the stock market does theoretically. That is true.

Yeah. Um, but yet you see them talk in ways that drive the market, the market of course is gonna react and it's gonna be anticipatory to what they do. But if you have a market that is getting completely crushed, um, that is capital that is not moving smoothly through the system which then affects unemployment and, you know, eventually,

obviously, uh, you know, ha has, you know, has somewhat of a say in deflationary environments or at least driving inflation lower. Um, and so, yeah, I mean, I think you're crazy to think that they don't look at the market but I don't think it's the first thing they look at certainly. But the housing market I think is very, very important. Yes. And we're gonna get to the housing market too. But before we do, Moreno's gotta tell us where interest rates are going next year.

I mean, I agree with everybody that they're likely to go down. The fed signaled 2 to 3 rate cuts. Like, like we discussed, like they've signaled these rate cuts. It. Yeah. Yeah. And, and, and, and you know, and I get why, you know, we had inflation, part of the reason why they were raising rates was to try and get a lid on inflation and slow things down a little bit. And

uh now that inflation has slowed, you know, it's time to start thinking about, you know, cutting because like you said, like, you know, the whole idea is they have this inflation target of 2%. Um And then, you know, trying to maximize employment. But, you know, there's a lot of stuff that goes into that and a lot of things that, um as Mark pointed out

like, sure, like stock market is outside of their purview per you know, stated purview, but everything they say is scrutinized by the market and as Mark pointed out earlier, like futures are already pricing in this potential rate cut.

Now. Now, pam, where, where are interest rates going? Ok. So I don't think there's a big mystery here. I don't think it's a mystery why we all agree that rates will be lower. They've already broadcast it. So, and the markets already reacted to it and celebrated it and so forth. So, I, I would say that, um, mortgage rates, I feel like mortgage rates have to get below 6.5%. And I think there's 6.9 today.

Yeah, they've got to get, they've got to get down below, you know, a year from now. They've got to be, you know, under 6.5 6% ish because, you know, people are, uh, it, there's just so much pressure and in this particular economy, I think, you know, like you all have pointed out that real estate is, is so important for a lot of reasons, you know, that people, consumers are really stressed right now. Um,

you know, you've been reading about, you know, how they've really gone out on a limb and, you know, many of them have taken money out of their houses and their home equity and so forth. So there's a lot of reasons why this matters greatly. And so I think it will, it will manifest itself I'm not gonna say it's gonna be in more

rate, 30 year mortgage rate is going to be at 5% a year from now. I wish it would be, but I, it's safe to say it's got to be in that 6% zone. Yeah, I think you're right. And, and by the way before we leave the topic of interest rates two points I want to make for our listeners. One, although the fed has literally said they're going to drop rates of half to three quarters of, of a percent. Remember that the, the fed has also said we are data dependent.

So there, there, if things change, they'll change. So this isn't a sure thing. It never is. Uh, the, the second point is that going back to the stock market, the reason that when the reason fed, the fed will drop rates is because the economy is getting softer, it's getting weaker, the unemployment rate's gonna go higher. And this is why going back to stocks that, that, that, that all of us here have said that the stock market may decline,

uh, in the first part of next year, that's what's gonna cause the feds, the fed to start cutting rates and that's gonna hurt stocks and correct me any of you if you think I'm wrong there. No, I, I agree with that. I think that there needs to be something broken a little bit more. You know, the fed has broken the real estate market for the time being. And I think they need to break things a little bit more to give

that deflationary environment. We've gotten the slowdown in inflation, but prices are still going up and to get that deflationary environment, you need, you know, maybe a major pullback in the market. And then I said major, you know, 15% you know, 18% something like that. Um And, you know, if you looked at what expectations are in now, 2024 earnings expectations

for 12% growth, I just don't see that. Um And so that's where you're, you know, that's the first culprit that I would think of what you're looking at. What else can they break to get this deflationary environment, get a little bit higher unemployment to get us to a good footing where you can start spurring the economy on to, to grow again.

Cool. Now we're gonna take a quick break and when we come back, we're gonna talk about what we think the housing market's gonna do. And more importantly, we're gonna come back and tell you exactly what you should be doing with your money based on our predictions. OK? We're gonna be right back after this.

OK? Gang, we are back. Uh, before we get going though, I'm gonna ask you to do me a favor.

Would you do me a favor and subscribe to this podcast? It's really important because it makes us more popular and it makes us able to bring you more uh podcasts like this one. So if you'd like us, do something for us and, and share this show with your friends and subscribe. It takes you two seconds. Really helps us. OK, back at it guys. OK. So let's talk about housing and then we'll, then we'll uh finish up by talking about what people should be doing right now in preparation for 2024. What do you, where do you see the housing market going? This one's tricky? What do you think? Mark?

Yes, it definitely is tricky. Um, you know, it's pretty much a locked up market right now and you're not seeing a lot of trade. You know, I, I live in Marin County, which is some of the most expensive real estate in, in the country and even out here, you're not seeing a lot of things turn over like you were 6, 1218 months ago. And, um, that's, I think by design, the Fed wanted to

lock up that market to, um, help drive some uh, deflationary uh aspects to the economy that being said, um, you know, if you have homes, like around here, the average home is $1.5 million. Well, at $1.5 million it was trading there at when rates were at 3% when you could get a mortgage at 3%. Well, now that I'm

mortgages at six or seven or 7.5. I think you said 6.9 today. Um You know, that house should be a million dollars and you haven't seen those prices come in yet. I've seen reductions, you know, people knocking off 50,000 people knocking off 100,000 maybe. But you haven't seen major price reductions. So something's gotta give in that market to get things to move again

and it's gonna be in that forced seller environment where people say, you know, my parents passed away and we're gonna sell the house and we don't care how much money we get because we want the money or my job is moving to Texas and I need to sell this house, right? That's the four seller environment where you'll start seeing

uh a little bit more price clarity and then that'll drive other prices in the market. So I think you're gonna see a drop in prices over the next season. You know, the selling season comes this spring. Um And you'll start seeing some prices uh come back down because, you know, if something's trading at 1.5 million at a 3% rate, you know, at 6% it should be a million to a million, two, right? Uh Rough numbers. Um So you're gonna see some price reductions, but eventually you'll see that market a lot.

And actually, I don't have uh maybe one of you guys do. I don't have a prediction, an expert prediction. I have my own prediction, but I don't have like an expert prediction of where the stock market or I'm sorry, the housing market's going next year. Do, do, do you Miranda Hammer Aaron?

I mean, like most, most of the predictions are saying, you know, like, like the uh the supply is going to remain somewhat low, like we still have that kind of in there. We've got tight supply. I know here in Idaho um as of July 2023 prices were actually down like 0.86% like, but you know Idaho is Idaho. So like it's not, it's not the rest of the country.

Um The thing that I will be interested in seeing and I don't know where this is going to go, but I will be interested in seeing like whether if mortgage rates come down and if

you know, housing becomes uh you know, home buying becomes a little bit more affordable as rates come down. But you know, we'll see like if, if the housing supply remains tight, then prices may not drop even as mortgage rates do and it may not be as affordable as we'd like, but I want to see how it affects the rental market because as we know uh I am a renter, I am a confirmed renter. I have no interest in buying. I like, I like my rental um and I like renting.

So it'll be interesting to me to see where rental prices end up, especially in a place where I am where we have a whole bunch of apartments being built. And how is that going to affect the rental market for people who haven't been able to buy a house in this current housing

market? But if I said to you, like, like I said, we used to stand on a street corner and ask people this, our housing price is going to go up down or sideways and by how much, what percent,

um what, what percent would you say? They're gonna go? And I'm talking about nationwide now, obviously, we all know that housing is local. Uh but if you had to guess and that's what these prognosticators do have to do nationally will, will home prices be 5% higher, 5% lower the same. What do, what do you think? Miranda?

Oh, I'm gonna say they're gonna, they're gonna drop a little bit. Let's do a 1 to 3% drop.

And that's not unlike now, you said a little more of a drop. You were talking about your specific market. But if you had to say nationally, do you think we're gonna see a greater than one or 2% drop?

Is that for me? Yes, that was for you. Yeah. You know, I mean, everything's local. You know, if you look at my local uh environment here, you know, in 2008, 2009, I think prices went down 10% locally. You know, you had some, yeah, you had some 40% drops. Right. Um, because you're in a credit crunch and it's a totally different environment than what you have today. So, if I'm looking locally, I think, you know, somewhere around 5 to 7%

is probably reasonable price drops. But I think there's some parts of the country, um, especially in areas where, which have been overbuilt over the last, you know, when money was free over the last call it 5 to 7 years where you can probably see a good 15% drop in prices. I'm surprised you guys are. We're actually, this is the first thing we disagreed on. I mean, at least we're getting a spread pam. What do you think? Yeah, I kind of disagree a little bit there. I think that um

I think housing prices are going to be stubborn, you know, obviously we keep saying over and over real estate is local. So we're kind of looking around our own areas, you know, where we are and I too am. Um you know, in Marin, in San Francisco, but I'm also Cape Cod and I'm looking at what's happening on the Cape as a better hoity toity. By the way, I have at the Cape and Paris on Cape Cod though. Uh When I'm looking at at at what I feel is happening,

I see affordability still being a big issue. I, I just really feel like consumers are, are pretty stressed financially. And I think if there's price adjustments and the, if you're asking me is the price gonna be lower? I'm gonna say, I don't think it's gonna be that much lower, maybe, maybe by 2% across the country as a whole. I just think prices are gonna be really stubborn because when interest rates, you know, mortgage rates are, are lower

and it seems like there's more affordability, it's still, there's a tight inventory, there's still fewer houses even with what marks saying where more people put their houses on the market because they are stressed out. Let's say, I still think net, net net, I think we're going to be surprised

that prices are not going to do what we think they're going to do is your guess down or up, slightly down, maybe slightly down. 2%.

I love it. She's right in there with my 1 to 3%

down. I hate for both of you to be wrong, but I think that's what's gonna happen. Um, but let's ask Mr real estate first. Here's a real estate, not a stock guy but a real estate guy. Aaron Aaron, what do you think's going to happen?

Yeah, I agree. I agree. 3 to 4% here in our own neighborhood, we see houses that are ridiculously priced and they're dropping like craziness. And this, this in Florida here. Real estate is what? Up? 40%?

Yeah, a ton. Um, but the influences that created that everybody left the cities because they could remote work. And now the offices are pushing everybody back and all the CEO is going. No, no, no. You guys got to be in the office. And so now these guys are trying to figure out new places to live. You got a ton of boomers that, you know, are eventually going to probably, you know, as they disappear, they're going to sell, you know, all those houses are going to come in.

We're not building homes fast enough. We've got people like me and we don't. And one thing let me pop in with one thing, we didn't even touch on inflation. So, I mean, when you're factoring in the fact that we're still at um above average inflation that, that plays into the housing market, obviously, but that would increase prices.

And you guys are, you guys are dismal and I'll tell you, I think uh I'm, I'm gonna be the outlier here. I think rates, I think uh housing prices are gonna go up again. And by the way, for those of you listening, coincidentally, everybody on this podcast lives in a very, very expensive housing market.

Um Ones that grew a ton, at least San Francisco traditionally has I don't know about in the last year, but, you know, I live in South Florida. So does Aaron in Idaho too, your prices went through the roof. So we've got the United States pretty well covered here. I say, I say housing prices are gonna go up 5% next year and I'll tell you why. I think because the lower interest rates are really gonna help. I think more inventory is gonna come online.

Um, and so I, I, you know that these are opposite things but I, I think that, uh, there's a lot of people that are call it a coiled spring. I think there's a lot of people that want to buy a house and I think that they might have the opportunity to do so with, with lower rates. So II I don't, I'm not, uh, I'm Sanin on housing prices. I think housing prices might go up

a little bit. I say, I don't know, I don't think, I don't think incomes are going up as fast as everything else is going up. So I think you're also going to see a shift of people moving out of the expensive areas and finding themselves into nice little tiny small towns and building new homes there and you're going to see those markets increase in value while you see these ones go down.

And you also have, I think overall though, I just think that everyone's expecting that. Oh, you know, prices are going to come down. I, I just, I just don't see it happening as much as people think as much as you realize we're all gonna be here again next December to see if we were right or not. Oh, shoot,

that's what we did. When, when Aaron and I would shoot that story, we'd go out the next year and say, here's what we said last year and here's what these people said and here's what the, how wrong you were. Yeah, exactly. You know, the monkey wrench in all of this is if Congress acts on institutional ownership of single family homes.

No, I didn't understand that at all. Oh, yeah. That, that's a good one too. Yeah. Private equity, private equity. Yeah. But that's actually a really small amount of homes though.

Yeah, it's a, it's very small. What you're, you're saying that they're gonna try to prevent private equity from owning single family homes. There's, there's discussions in Congress, it's kind of started. Um, and, you know, they don't like it because obviously it's, they're, they're taking homes off the market from homeowners and turning them into rentals. Yeah, I understand that. And yet I thought we still lived in a free country, I guess not. But we'll, we'll find out what happens. They won't create laws against ho a

well, ok. You know what guys, before we run out of time, I promised our listeners that we would tell them how to position their long term savings as a result of all this prognosticating we've been doing. So, let's go around the horn real quick.

Uh, Mark. You're, you're our guest expert today. What should I be doing with my long term savers? No. I'll just tell you what I'm doing with, with most of my clients is, you know, we, we've maintained a good asset allocation strategy so dependent upon the client's risk. You know, if you're lower risk, you may have 50% equities, 50% bonds. You know, my higher risk younger clients will have 70 or 80% equities. But of them,

that equity allocation, I've taken some of that money away and put it into more stable protected things like gold. Um So I have about 5% gold in my client portfolios and about five or 6% is in short term treasuries because, you know, short term treasuries earning 4 to 4.5% is a great place to park some of that money and act as ballast

in your portfolio. That being said, if everything we've talked about comes to fruition, you know, you have a decent enough market where you get 45 6% return. Well, that beats your goal position that beats your uh your cash position. Um And then lastly is the bond portion of the portfolios. You know, you've had bonds had a terrible year last year. Um This,

they've been relatively flat and I think we have, if we do get those rate cuts that we're talking about, we have a pretty good bond market coming up for us. So I've maintained a full bond allocation for clients. So it's, it's a pretty standard allocation if you want to talk about like the 6040 portfolio, which of course, you know, two years ago, everybody was talking about how it was dead this year. It's up 13%. Um

You know, it's a pretty standard allocation with the caveat of let's have a little gold in case everything goes wrong and let's have a little cash because cash is earning us a good 4 to 4.5% without us having to do anything. I was gonna, that you brought up a good point mark and I was gonna ask you guys this, uh, Pam did a prediction that, you know, the market is only going to go up to 5% like he does basically.

So we have a lot of our money in, uh high yield savings accounts. We just parked it there for safety. But as we talked about it, if all that's all the interest is going back down, I've read something about, hey, throw it all in a CD, it's up above what, 5.5 lock it in. If you think that if you think the market is going to be topsy turvy and you have no idea. Maybe a CD is the right way to go. Is that something

to consider? Certainly, I mean, if, if you're, if you're looking at a year, um, you know, a year, uh, is a good CD, you can get a good rate on the year. A long CD. Um, you know, the decision then is what do I do after a year? And hopefully the market hasn't gone up

10% and I'm sitting in a 5% CD during that time. So you're playing a little bit of a game, um, versus having the liquidity of having it in the high yield savings. But I'll go to pop in to say this one thing. I mean, it's like the answer is, you know, diversification wins all battles. Um You know, having enough cash for me is, you know, um it's, it's earning

enough that I can feel like I, I feel good about having enough money in cash. And that to me is my biggest thing for 2024 your sleep at night, portion of your, I don't want to be stressed out that I have too much money in the market. And I, yeah, I, I, even if I am giving up the gains of the market in lieu of having that safety, I just see from where I sit, I see a lot of people that just don't have enough money really in cash.

Well, I've got boxes of 50 stacked up all over my house.

Um Now, you know what about long, I'm thinking about, you know what I did? I bought, I bought a uh five year uh treasury bond a couple of months ago at 5%. Well, 4.9 something percent

and I'm really happy I bought that. I wish I'd bought more but I'm thinking about now, uh, I should have already bought more longer term bond funds or bond ETF, uh, and I have not done that and now I'm waiting for interest rates to take back up because, you know, obviously if you get a one year CD and next year when that thing matures interest rates are back to two, then you, you're gonna wish you'd gone longer than that.

What a and, and I guess obviously you can, you can make a ladder. You can have some stuff coming too short and some stuff coming too long. But I think that getting in some longer term, at least medium term when I say medium term, I mean, 5 to 10 year, uh, either bonds or bond funds. I think that makes sense. Do you mark?

Yeah, absolutely. I have all of my clients in some form of a, you know, SHD or, or, you know, 3 to 7 year treasury funds, um, the portions of their allocation will be in that kind of stuff. I have some longer term, um, you know, Corporates sitting out there. But, uh, yeah, 3 to 7 years a pretty good, I think, uh, sweet spot spot. I wish I'd done that a month ago or actually just a few weeks ago. I know the interest rates have dropped like a rock lately.

But anyway, and Miranda, I know, let me see if I can guess what you're, what you're gonna do.

Let's do this, let's do it.

You're gonna put some money in an S and P 500 index fund every month and, and you're not gonna worry about it.

That is correct. But we've worked together before folks. I'm very boring and a very simple person. So that's for sure.

But no, uh, no, I'm gonna keep, so I have my regular dollar cost averaging plan and I'm gonna keep sticking with that dollar cost averaging plan. Now, I have done in a couple of my accounts. Um as we know that I, I do enjoy using a bucket strategy to some degree. And so like, especially for my son's 529.

Um You know, I've, I've been using that bucket strategy to make sure that I move, um move a portion of that, the portion that I think I'm gonna need in the next two years into cash. So that, um

so it's there, it's ready. Uh I've captured some gains on it uh in that 529 but the cash is there and I don't have to, um I don't have to sell things at a loss if the market drops. And so to, to help pay for my son's school. And so, you know, I, I kind of use that bucket strategy to look at different things like in my travel fund or in

other areas of my life where I'm like, OK, I know I'm gonna need some of this money uh coming up soon. So let's capture some gains. Let's move that into, um, you know, cash instruments so that we can in cash like things so that, you know, it's, it's there and I'm not selling, selling things if I, you know, and if I do have to sell stuff at a loss later,

um, well, you know, congratulations on that tax deduction. So like, but, but yeah, so yeah, I'm, I'm pretty simple and pretty boring about stuff and I'm going to just, you know, I'll stick with my long term dollar cost averaging strategy for my long term stuff. And then I have a few accounts where I go ahead and use that

bucket. No change based on anything that's in the wind. Now, let's talk to bi coastal pam.

Pam with a, with a house in San Francisco in the cape. What are you doing? What are you doing with your, with your long term savings? My, well, my advice to myself is the same advice I would say for anybody is diversification. I said that earlier divers, I say it to myself all the time diversification wins all battles. And I constantly remind myself to that an asset allocation does matter, you know, so pay, just paying attention is the perennial advice year over year, over year,

especially for next year. I just feel like, you know, some, you know, who you are, either you have enough in cash or you don't, but, you know, don't feel like you have to move everything back into the market, you know, just make sure that you're really well positioned. Uh, because throughout the year as we've talked about, you know, the market's likely to, it's not just gonna be, you know, straight line up, ending the year up, say 5% or whatever it's gonna be. It's gotta be like, you know, up and down and I just, uh, think that it's just, um,

making sure that you've got enough money in, in Kansas, but I'm focused on through 24.

Awesome. Well, we do have to close the podcast but I want to remind you folks that are listening, that

we, we have a consensus on almost all this stuff. So you can almost bet that is not what is going to happen. Do the, do the opposite of what we're saying and you'll probably be better off.

Yeah. What about the old adage? Be fearful when everybody's greedy and be greedy when everybody's fearful. Is that what I tell you right now? I've made a lot of money doing that. Yep. It does always work and always be in the market. You know, I was really afraid of the stock market in 2023. Uh, and, and I learned that I'm often wrong about that so I just left everything made a ton of money. Ok? We are out of time. Folks

are never out of topic. Dig a little deeper. You're gonna find links to lots more info on our show notes. And remember if your goal is to make more, to spend less to retire rich. Well, your online home is Money Talks news.com and don't forget to check out Miranda's online home as well. That is Miranda Marquet Ma rquit.com. And of course, you want to visit Pam at her website that is Wealth ramp.com and Mark, you're gonna have to. It's not in my script. Tell me your website.

Yeah, you can come visit me at Sure Pine wealth.com. Sure, Pine wealth dot And you'll find him on We ramp Yes. Listen to you shamelessly plugging. Ok. If you've got a question, comment or topic, you'd like to suggest, tell us about it. You can email us at hello at Money Talks news.com and let me repeat what I said at the break. If you like us, show us, subscribe to our podcast, tell your friends really helps us. I am Stacy Johnson,

I'm Miranda Mart.

Making it Rain, Aaron Freeman and Pam and Mark. We sure appreciate y'all's time and we look forward to counting the minutes until you're back on our podcast again.

Thanks for, thanks for hanging out with us everybody. We're gonna see you right here next time.