As a result, a new market regime means new investing strategies will be necessary, James and Will write.
One of the big takeaways from the story was how hard it seems the next 10 years will be for investors.
Setting aside recency bias, it’s been relatively easy to generate good returns in the market over the past 10 years. Sure, there have been bumps in the road. But if you bet on most of the big-name tech stocks — or took a chance on some innovative newcomers — you’re probably sitting pretty.
But elevated rates mean cash won’t come cheap for those innovative companies looking to take chances. It also means the bar for returns is that much higher. (More on that here.)
As James and Will outline, that could mean looking to mid-cap stocks with room to grow. Or even going abroad, where stocks aren’t as pricey.
Whatever you decide, patience will be the name of the game for investors going forward. And to be fair, that’s not much different than how things have always been.
Your Monday headline catchup
A quick recap of the top news from over the weekend:
3 things in markets
2024 is shaping up to be a great year for the economy — and the stock market. After three years of pain, America is finally seeing the job market holding up and inflation cooling. So, if this year was about the hard work of stabilizing the economy, then next year is about enjoying the fruits of that labor.
Speaking of 2024… JPMorgan’s top market strategist issued his 2024 stock forecast. It’s the most bearish projection on Wall Street so far, seeing the S&P 500 ending next year at 4,200 — representing a potential downside of 8% from current levels.
Crypto stocks have notched triple-digit rallies this year. AI names may have commanded the market’s attention lately, but another corner of the market is seeing impressive gains: stocks tied to digital assets. Coinbase, MicroStrategy, Riot Platforms, and Marathon Digital shares are up more than 250% in 2023. Meanwhile, bitcoin has climbed about 130% year-to-date.
3 things in tech
ChatGPT is good news for employees who suck at their jobs. AI might just be the great equalizer. Studies show that it’s not helping everyone get better at their jobs. Instead, it’s mostly turbocharging workers who are bad at their jobs — narrowing the gap between high and low performers.
VC “power outfits.” Business Insider’s 2023 rising stars of VC shared the clothing items that help them look and feel the best at work. Their style is a bit less traditional and includes pieces like Chelsea boots, jeans, and high-top sneakers.
Leaked meeting transcript: AWS VP says senior engineer departures are “making us better.” Some employees were concerned about the exodus. But Prasad Kalyanaraman told employees last month that attrition helps the company be more focused.
3 things in business
Why Elon Musk’s Cybertruck won’t be coming to Europe anytime soon. The first reason is pretty simple: the Cybertruck is too heavy. To drive a vehicle heavier than 3.5 tons in the EU, you may need a truck driver’s license. Plus, Tesla faces a bevy of production challenges.
A Gen Xer making $344,000 secretly worked three jobs. Then two of them laid him off. The 48-year-old said this scenario is exactly why he was overemployed. He said balancing three jobs was transformational for his finances (but also led to burnout).
Doom saving vs. doom spending. In the face of economic uncertainty, some Americans are “doom spending” to help cope with the stress. Meanwhile, others are “doom saving,” which could ultimately cause headaches for some businesses.
In other news
What’s happening today
The Oxford Dictionary announced its Word of the Year. The contenders included beige flag, de-influencing, heat dome, parasocial, prompt, rizz, situationship, and Swiftie. Check out the winner.
Happy birthday, Jay-Z! Tyra Banks, Blake Snell, and Thomas Carlyle were also born on this day.