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4Thought’s Multi-Method Investing® Market Perspective 1-23-24

4Thought provides you with actionable investment analysis and perspective on the financial markets.


4Thought provides you with actionable investment analysis and perspective on the financial markets.

Contact us to determine whether any ideas presented are applicable to your situation before taking any actions with regards to your financial plan or investment portfolio. 

Hear from Chief Investment Officer Jesse Mackey in our most recent Multi-Method Investing® Market Perspective.



I’m Jesse Mackey, CIO of 4Thought Financial Group, and this is 4Thought’s Multi-Method Investing® Market Perspective as of January 23rd, 2024.

Stocks and bonds have begun 2024 with mixed returns. With the exception of US large cap stocks, most asset types are showing slightly negative results after stocks ended 2023 with strong gains in aggregate. US large cap stocks are the best performing publicly traded broad asset type so far in 2024, while emerging markets stocks are the worst. But this short window is not necessarily reflective of the bigger picture.

On Friday, January 19th, the S&P 500 Price Return Index breached its prior all-time record price (last seen on January 4th, 2022). This provided confirmation in arrears that October 13th, 2022 was in fact the bottom of the Bear Market that started on 1/4/22 and that we have indeed been in a Bull Market since 10/13/22 (as previously expected based on historical data analysis). Also recently, on December 8th of 2023, the S&P 500 Index completed its first "Wolf Market" (one that began on 7/27/23) in the larger Bull market. We define a Wolf Market as a period including a 10%+ correction (but less than 20%), plus the recovery back to the pre-correction peak price. Wolf Markets are in fact a subset of the traditionally defined Bull Market. Both the confirmed Bull Market and the recently concluded Wolf Market have significant implications for portfolio management strategy.

The history of the S&P 500 Index since 1950 reveals that once Bull Markets have been identified (at which point a new record price has been achieved following a Bear Market), they have continued for an average of an additional 2.44 years until the beginning of the next Bear Market (with the shortest period at 6 days and the longest at 7.44 years) and they've shown a further cumulative gain of 52.53% (with the smallest at 2.09% and the largest at 225.74%). Looking at Bull Markets as a whole (from trough to peak), on average they have lasted 4.29 years (with the shortest at 1.15 years and the longest at 9.55 years) and have shown a total cumulative gain of 133.09% (with the smallest at 44.62% and the largest at 341.05%). Since the most recent Bull indication on January 19th (of 2024), only 4 days have elapsed (with a gain of 0.66% as of the close of business yesterday), whereas 1.28 years have elapsed since the Bear Market trough on 10/13/22 (for a total cumulative gain of 38.92% as of the close of business yesterday). 

At a greater level of detail, the periods immediately following Wolf Markets have historically been very favorable for stocks. Historical data shows that approximately 55% percent of Wolf Markets are immediately followed by an Eagle Market (a period that includes trailing 1-year returns of 30% or greater without any intervening 10%+ corrections), and the vast majority of the remaining 45% are followed by a resumption of a traditional Bull Market (which is also favorable). Furthermore, historically many Bull Markets are intersected by several Wolf Markets (up to five) before a new Bear Market begins. In this case we just recently completed only our first Wolf in this Bull (which bodes well for the continuation of the broader traditionally defined Bull Market). 

Based on analysis of the complete historical market type data set using our Multi-Method Adaptive algorithmic process, we are now allowing overweight allocations to Selective/Concentrated Investing and underweights to Opportunistic Investing, with neutral weightings to Strategic Asset Allocation and Liability-Driven Investing.

From a probabilistic analysis perspective, stocks of most types range from slightly undervalued to moderately overvalued, while bonds of most types range from slightly undervalued to near fair value. Long term US Treasury Bonds now reflect the most attractive pricing relative to the alternatives, while US growth stocks are the least attractive. 

Against this backdrop the outlook for stocks in general is now moderately positive over the intermediate term based on the overall aggregate of our historical market-type data analysis and quantitative probabilistic analysis.

I hope this was helpful. If you have questions or you’d like to discuss what this means for your particular situation, please contact 4Thought at 516-300-1617 or at info@4tfg.com – and don’t forget to subscribe to our blog feed and our YouTube channel. Thanks for watching, and see you next time.

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