February 29, 2024

In our last commentary, we hinted at the broadening of the market, citing gains in stocks like Berkshire Hathaway, Visa, McDonalds and Marriott International as proof that the Magnificent Seven / Mega Cap-8 are not the only companies making money.  This trend is continuing, with healthcare, industrial and technology sectors all hitting new highs last week, boding well for the highly diversified portfolios held by our clients.  While Worcester Advisors includes the Magnificent Seven / Mega Cap-8 in portfolios, we avoid overconcentration due to associated risks.  Instead, we invest in a wide range of high quality, attractively valued, stocks, most of which are reporting strong earnings and riding this expanding wave of price appreciation. 

Corporate earnings are closely correlated with stock price movement.  According to Zack’s Investment Research, Inc., the S&P500 is expected to post earnings per share growth of 11.3% in 2024 and 12.5% in 2025, supporting our forecast of strong equity performance and a continued bull market.

Bull markets are a period when major stock market indexes are generally rising, with market indexes eventually reaching new highs.  Since 1957, the average bull market has lasted nearly five years and generated an average S&P 500 return of more than 169%. We believe the current bull market began in October of 2022, putting us less than a year and a half year into what could be a long period of growth.

Past performance is not indicative of future growth. Risk is inherent in any investment.