As we wrap up a busy 2024, we want to take a moment to thank you for trusting us to help you achieve your long-term investment objectives. It’s been a dynamic year in the markets, and we’re pleased to share some reflections and updates as we look toward 2025 with optimism.
This year, markets presented both opportunities and challenges, but the backdrop for investors remained stable and encouraging. Consumers, corporations, and banks showed resilience, providing a solid foundation for the markets, while investor sentiment steadily improved.
November was the strongest month of the year for the S&P 500, and we remain cautiously optimistic about the potential for continued gains as the year wraps up. While some may worry that markets have advanced too quickly, history shows that strong starts are common in bull markets. According to FactSet, since 1937, the S&P 500 has averaged annual returns of 23% during bull markets—closely aligning with the performance we’ve experienced so far in this cycle.
Corporate balance sheets are robust, with record levels of cash providing a buffer against potential downturns and supporting further investments. Strong corporate earnings have also played a pivotal role in bolstering market performance, reflecting the resilience and adaptability of businesses across sectors. While much of this year’s gains have been driven by the “Magnificent Seven” mega-cap tech companies—now accounting for nearly 32% of the S&P 500 market capitalization—we’ve recently seen encouraging signs of a broader market rally. Notably, our U.S. large-cap portfolio outperformed the S&P 500 in the third quarter, showcasing the benefits of diversification and careful stock selection.
Small-cap stocks also stood out following the election, with financials, industrials, and energy sectors driving their outperformance. These gains reflect optimism about potential policy changes favoring domestic manufacturing, regulatory relief, and tax cuts.
This year has highlighted the importance of focusing on attractive valuations across the market. Recent shifts in market dynamics have created new opportunities for investors. As valuation gaps have widened, we remain committed to identifying investments that offer compelling long-term potential.
By maintaining a diversified portfolio and emphasizing value at the right price, we aim to position you to capitalize on these opportunities while staying aligned with your long-term objectives.
In 2024, we were busy refining portfolios to enhance long-term value, adding four attractively valued stocks that should drive long-term returns. Our commitment to disciplined management and performance has also earned recognition: Cardinal Capital’s U.S. Balanced Portfolio received the prestigious 6-star Top Gun designation from Zephyr for the five years ending September 30, 2024, marking the second consecutive quarter of this achievement.
As we turn our attention to the new year, we remain focused on proactive management and personalized advice. We’re actively identifying opportunities such as loss harvesting to minimize taxes and maximize outcomes, as well as adding new high-quality equities and bonds to our portfolios. We’ll continue to monitor your allocations, ensuring it remains aligned with your goals, and will recommend adjustments as needed.
We are deeply grateful for the opportunity to work with you to achieve your financial goals. Your confidence in our process helps align our interests and work to deliver the best outcomes for you.
The new year brings fresh opportunities, and we’re excited to continue this journey together. If your goals or circumstances have shifted or if you have any questions, please don’t hesitate to reach out. We’re here to support you every step of the way.
Wishing you and your loved ones a joyful holiday season and a prosperous 2025.
