10 Reasons for Investors to be Thankful in 2024

If your family is like mine, you gather at the Thanksgiving table and, before plunging into a Butterball, turducken, or tofurkey, you take turns expressing what you’re thankful for. To be honest, it’s not my favorite part of the meal. I struggle to verbalize heartfelt sentiments, typically fail to produce something original, and get distracted by the crispy fried onions on my mom’s green bean casserole.

Still, I appreciate the ritual. You’ve got to love a holiday centered around gratitude, which is apparently linked to health benefits. In that spirit, I thought it’d be appropriate to reflect on our many blessings as investors.

I realize that this may come off as Pollyannaish. There are more than enough risks out there to keep us all awake at night. Geopolitics, debt, and robot apocalypse all spring to mind. But there are many more reasons for investors to be thankful. Please feel free to eat while reading my top 10.

1. The fact that we’re investors. If you’re reading this, you most likely have money in financial markets. We’re fortunate. According to a Gallup Poll, 62% of Americans own stocks directly or indirectly, meaning millions do not. It’s hard to invest when you’re living paycheck to paycheck or burdened by debt. For those of us with the means, though, investing is a wonderful way to preserve and grow wealth. Deferring today’s consumption to achieve a future goal, whether it’s retirement, college savings, a down payment, a bequest, or a rainy day, is a smart and responsible thing to do.

2. Fabulous recent investment returns. The US stock market emerged out of the wreckage of the 2007-09 financial crisis to deliver average annual returns of 14% for the past 15 years—far exceeding historical norms. Recent gains have been higher. As of this writing, the Morningstar US Market Index, a broad gauge of equities, was up more than 25% for 2024. Returns in 2023 were similar. We had a bad year in 2022, and the “pandemic panic” of March 2020 was scary. But investors who’ve stayed the course have been rewarded. In the past five years alone, investors holding broad US market index funds have more than doubled their money. That far exceeds the inflation rate. Speaking of which …

3. Inflation has subsided. A couple of years back, we feared the kind of rising price spiral the US experienced in the late ’70s and early ’80s. For those who weren’t alive or don’t remember, the inflation rate nearly hit 15% in 1980, and interest rates had to be hiked to 20%. Talk about “restrictive”! There’s no denying that prices are uncomfortably higher than before the pandemic and borrowing costs are elevated. But inflation has come down from 9% in mid-2022 to 2.6% today. The Federal Reserve even cut interest rates in September and November. It could be much worse. (Argentina’s inflation rate is close to 200%!)

4. Bonds are back. In 2022, we saw “the worst bond market ever,” as sharp interest-rate hikes designed to combat inflation wreaked havoc on fixed-income assets. Today, the Morningstar US Core Bond Index yields 4.7%. That’s decent—certainly better than most of what we’ve seen for the past 15 years. What’s more, bonds helped cushion portfolios during stock market selloffs in the third quarter of 2024. When bonds and stocks suffered simultaneous losses in 2022, the “death of diversification” was proclaimed. That was hyperbole. The classic 60/40 stock/bond mix won’t work in every market, but it remains a perfectly valid way to invest.

5. The US economy is strong. We’ve been hearing about “soft landings” and “hard landings” for so long, and yet somehow, we’re still airborne. Despite inflation, rate hikes, and countless other challenges, growth in US gross domestic product registered near 3% for the third quarter, which is pretty darn good. At 4.1%, the unemployment rate is very low by historical standards. Sure, there are problems, including inequality and the national debt, but much of the world looks longingly at the dynamism of the American economy. It’s a relative game, and we are in far better shape than most.

6. The election is over. For some, the results are distressing, and for others it’s “all’s well that ends well.” For many investors, it’s “all’s well that ends.” Markets like clarity and certainty, and the election provided it. Question marks remain around tariffs, deficits, and more under the second Trump administration. But investors should remember that markets have both thrived and crashed under regimes of all stripes. At the end of the day, the investment impact of politics is typically overestimated.

7. The US financial system has not collapsed. Remember the spring of 2023, when Silicon Valley Bank imploded? Then a couple of months later, First Republic became the second-largest bank failure in US history. There were fears that rapidly rising bond yields might trigger another financial crisis. I remember getting messages of reassurance from the custodian of my 401(k) assets. But contagion was avoided. And I’m still chuckling over the joke that SVB depositors seeking government assistance were “venture capitalists turned venture socialists.” You’ve gotta love investment humor!

8. Some speculative excesses have been flushed out. Remember 2021, when special-purpose acquisition companies and NFTs were all the rage, and new cryptocurrencies were launching daily? Message boarders, many of them flush with “stimmies”—pandemic-era government stimulus checks—created the “meme stock” phenomenon. The vibe reminded me of the late 1990s, when I was starting my career, and “dot-coms” were IPO’ing on their number of “eyeballs.” In 2022, several bubbles burst. I certainly hope folks didn’t lose their shirts speculating on these “assets,” but as my colleague Jeff Ptak once wrote, investing should be boring.

9. Artificial intelligence is exciting. Despite aforementioned robot apocalypse fears, I believe it’s better to embrace new technology than fight it. I even used AI to help me research this article (not the part about the green bean casserole). It’s impressive, which is not to say there aren’t issues. It will undoubtedly disrupt and displace. It needs guardrails. But the spectacular recent gains in investments related to AI reflect its promise. One of my favorite speakers at this year’s Morningstar Investment Conference intrigued me by envisioning AI applications for medical research.

10. Attractive valuations are out there. As mentioned, the US stock market has produced phenomenal returns going back years now. Few predicted such strength coming out of the 2007-09 financial crisis. Stocks have made fools of the skeptics and doomsayers, as they have throughout history. Now, bubble watchers say that AI enthusiasm has led to dangerous overvaluation. Warren Buffett and Berkshire are selling. If you don’t like market-level valuations in the US, there are plenty of segments that look far less frothy, like value stocks, dividend-payers, and small caps. Bonds are back, ending the annoying acronym TINA (“there is no alternative” to equities). I’m a big believer in global diversification and remember periods when international markets outperformed the US. They could be a good hedge if the US dollar weakens. Forward-looking views from my colleagues at Morningstar Equity Research and Morningstar Investment Management can help highlight opportunities.

With that, I wrap up, hopeful that you derive some satisfaction from counting blessings this Thanksgiving. If you’ve got other investment reasons to be thankful, email me at dan.lefkovitz@morningstar.com. Don’t expect an immediate response, though. I’m off to pick up pecan and apple pies. My Turkey Day plans include family, football, and green bean casserole—with a heaping portion of gratitude. Enjoy!