SIOUX FALLS, SD (KELO)–2023 was a year filled with some financial successes as the FED stopped raising interest rates in May, inflation dropped to 3 percent by the end of the year and the stock market saw some recoveries, especially early on in the year, but despite the numbers, many Americans still struggled to keep up with rising expenses.
In tonight’s Your Money Matters, financial advisors say to expect another challenging financial season this new year.
“I think 2024 will be kind of a wild ride,” Sioux Falls financial advisor Neil Graff said.
Graff says he’s preparing for a year of volatility that could make it a more financially challenging year than 2023.
“I think there are a handful of events or issues facing our world right now that are causing a lot of uncertainty in the financial markets. The financial markets do not like uncertainty,” Graff said.
From a contentious presidential election year to two ongoing wars across the globe…
“The U.S. is a part of them, we’re helping to fund the particular side we’re embracing and by funding we’re putting ourselves in a real financial bind, we’re not sure where all the money is going to come to fund these two wars. That again adds to the uncertainty and the volatility,” Graff said.
Graff says people should expect the unexpected, something the economy saw at the close of 2023.
“Overall the market was very good in December, and it was kind of unexpected,” Graff said.
But even with some big gains, there could be some big losses. Graff is advising his clients to make sure their investments are protected heading into the new year.
“It’s going to be important for people to guard their portfolios against the downside risk potential in 2024,” Graff said.
A potential positive change this year could be the Federal Reserve’s goal of lowering interest rates as it hopes to make a soft landing on the past 2 years of raising rates to fight off inflation.
“Historically the Federal Reserve has not had a very good track record when trying to do that,” Graff said. “We may see a recession, the only question is whether it will be a more mild recession or a severe recession.”
Graff’s 2024 predictions echo some of the common themes we heard from people in KELOLAND and their thoughts on the economy as 2024 begins.