2024 Economic Outlook: More stability and prosperity
The Sanibel Captiva Trust Company kicked off the new year with its annual 2024 Economic Outlook event, a global economic overview that also dove into artificial intelligence, the presidential election and the stock market.
The breakfast program, held Jan. 22 at the Tribby Arts Center in Shell Point Retirement Community, was kicked off by The Sanibel Captiva Trust Company’s Founder and Chairman, S. Albert D. Hanser and Sanibel Office President, Jeff Muddell, MBA, CFP®. The event attracted more than 130 people and featured insights from four of the Trust Company’s industry experts:
• Chief Operating Officer, Ian N. Breusch, CFA
• Senior Vice President and Senior Portfolio Manager, Edwin C. Ciskowski, CPA, CTFA
• Executive Vice President and Senior Portfolio Manager, Craig J. Holston
• Chief Investment Officer Andrew Vanderhorst, CFA, CAIA, CPWA, CFP®
Ciskowski began the discussion with a look back at 2023, a year many industry insiders thought would be filled with market volatility due to instability across the globe. However, that was not the case.
“The S&P 500 showed a significant increase for the year, climbing over 26%, while the Dow Jones Industrial Average also climbed, although slightly less, at 16% for the year,” Ciskowski said.
Beneath the surface of this broad and robust index performance, however, there was a historical divergence in performance across styles, with the Russell 1000 Growth index registering a 43% return, while the Russell 1000 Value index grew a more modest 12%.
Holston continued the discussion by touching on a topic at the top of everyone’s minds – will the U.S. presidential election in 2024 have a positive or negative impact on the economy? Holston researched election years dating back to 1948, noting only two occasions – in 2000 and 2008 – when the S&P 500 had a negative return for the year.
Vanderhorst pulled artificial intelligence into the conversation, noting how AI can be applied in the financial sector. While opinions are mixed and it is still early in its usage, Vanderhorst sees its potential as a risk management tool.
“This is important for pension funds,” he stated. “Seeing trends over three-, six-, 10-month periods, we can see if there is exposure in a portfolio that people need to be aware of. Using AI tools, we would be able to make a tweak because our client has too much exposure that they would otherwise never see until it’s too late.”
The program concluded with The Trust Company’s outlook for 2024. The firm’s management team expects the Gross Domestic Product (GDP) will rise, the labor market will be strong, and interest rates will remain elevated and stay higher for a longer period than the market expects. However, the Federal Reserve will likely slowly cut rates, perhaps three to four times this year.
“The S&P 500 has seen a 12% annual return over the past 10 years,” Vanderhorst said. “We ultimately think that over the next 10 years, that number could be lower, resulting in regression to the mean. In other words, past performance doesn’t guarantee future results. We believe similar results could be seen with long-term market performance of small cap stocks, foreign/emerging market stocks, and corporate bonds.”
Fort Myers Office President, Megan Marquardt, managed the robust question and answer session that followed the presentation.
For more information about The Sanibel Captiva Trust Company and its services, visit www.sancaptrustco.com.
About The Sanibel Captiva Trust Company
The Sanibel Captiva Trust Company is an independent trust company with $4 billion in assets under management that provides Family Office and Wealth Management Services, including investment management, trust administration and financial counsel to high-net-worth individuals, families, businesses, foundations and endowments. Founded in 2001 as a state-chartered independent trust company, the firm is focused on wealth management services that are absolute-return oriented and performance driven. Each portfolio is separately managed and customized specifically to the client’s yield and cash-flow requirements. The Naples Trust Company and The Tampa Bay Trust Company are divisions of The Sanibel Captiva Trust Company. Offices are located in Sanibel-Captiva, Fort Myers, Naples, Marco Island, Tampa Bay, Belleair Bluffs-Clearwater and Tarpon Springs. For information, visit SanCapTrustCo.com.
