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With 2024 imminent, many investors are wondering how to allocate portfolios and what the Federal Reserve will decide regarding interest rates. While there are many strategies to consider, there are certain mantras that will work best for the new year. Cole Smead, Smead Capital Management CEO, and Matt Maley, Miller Tabak Managing Director, join Yahoo Finance to discuss the top market mantras every investor should consider going into 2024.
Maley cautions against one mantra that has worked well in recent years - buy the rumor, sell the news. "It is likely the S&P (^GSPC) might not make money over the next decade, including dividends, and when I say likely that's our bet," Maley says. "The other thing I'd throw out there is, that is a nightmare for retirees, that is the kind of world that people are not preparing for on this hype and excitement, and the question is 'Is stock market failure going to cause everyone to lose enthusiasm for stocks?' and that is a real danger."
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
BRIAN SOZZI: Call another mantra. We're focused on here at Yahoo Finance today, that is buy the rumor, sell the news. And that certainly seemed to do NVIDIA quite well this year. What happens to AI plays like NVIDIA next year? And we get results that maybe aren't as robust as they were this year. Do you think we see sell offs?
COLE SMEAD: Yeah. I mean, the good thing for the stocks that have played that up is it's greatly grown their multiples. That's what they've done successfully. And as I think you watch executives sell their stock in the open market, I mean, that's played right into their hands. The flip side is you actually have to go out and do those things.
And as we've learned in prior episodes of Euphoria, like this on subjects in the past is that that can take a long time. I mean, just go back and look at what happened in the late '90s. I mean, you can pull up the Ciscos, the Oracles, very few of them ended up ever going to new high prices after that.
Microsoft obviously, successfully did, but they had to go through a decade of hell to get there. What I think the real danger and buy the rumor, sell the news is it is highly likely that while we have retirees as excited about owning stocks as they've really ever been as a group of investors in stocks, it is likely the S&P might not make money over the next decade, including dividends.
And when I say likely, that's our bet. And the other thing that I would throw out is in real terms that's a nightmare for those retirees. That is the kind of world that people are not preparing for on this hype and excitement. And the question is stock market failure going to cause everyone to lose enthusiasm for stocks?