Market Review: A strong start to the year for investors

After a strong close to 2023, stock markets around the world continued to climb during the first quarter of 2024. Excitement around the potential applications of artificial intelligence (AI), strong corporate earnings growth and optimism for interest rate cuts helped to fuel the strong performance of stocks during the first 3 months of the year. Buoyed by leading technology companies like NVIDIA and Microsoft, the S&P 500 logged its best start to a year since 2019.

Market Performance (as of market close March 29, 2024)

As mentioned, “Big Tech” continued to be a standout performer driven by investor excitement over AI. Fueled by its investment in ChatGPT maker Open AI, Microsoft became the second company to reach a market cap of US$3trillion, joining Apple which achieved this last year. AI chipmaker NVIDIA also announced another round of exceptional results, which prompted a global stock market rally. Additionally, the first quarter saw the eagerly anticipated increase of the Trans Mountain pipeline’s capacity to Canada's west coast, with reports of substantial orders for Canadian crude from Asia. While the full economic benefits may unfold gradually due to ongoing investment and regulatory challenges, the first signs are promising.

What should I do?

It’s easy for investors to fall susceptible to FOMO (fear of missing out) when stock markets rally and this can lead to poor investing decisions. The old adage in investing is that investors should aim to “buy low and sell high”, capitalizing as the market goes through cycles and buying high quality companies while their price is depressed and they are “on sale”. Unfortunately, many investors do the exact opposite, buying into the market when prices are at all-time highs and selling when the next inevitable downturn happens. This is why it is so crucial for investors to have a well thought out investment plan that is appropriate for their unique risk tolerance and situation to help them avoid falling into this “FOMO” trap. A simple dollar cost averaging strategy where you make a regular bi-weekly/monthly contribution into a well-diversified portfolio is a great starting point and a financial advisor can be a great resource in helping you set up an investment plan tailored to your unique situation.

Riley Love, MBA, CCS, BSc. Pharm
Partner/Financial Advisor – Love & Persson Group