Third Quarter 2024 Review

U.S. stocks as measured by the S&P 500 posted their fifth best start to a year in a quarter century. The S&P 500 rose +15% and reached 32 new all-time highs, while volatility remained relatively subdued. In the first six months, there was only one instance when the index rose or fell by more than 2% (and in that instance, it went up.

As the third quarter began, the stock market entered a volatile patch, declining nearly -8% in 14 trading days. Such sudden, sharp declines can of course be unsettling. But they are also the hallmarks of sentiment-driven market corrections, which feel bad in the short term but are in fact quite normal and even healthy for equity markets in the long term.

As we detail in this quarter’s letter, we believe the U.S. economy has far more fundamental strengths than weaknesses, with U.S. corporations, banks, and consumers in overall strong financial shape.

In other words, we believe now is a time to stay the course.