- The S&P 500 stock index gained 23% in 2024. The tech-heavy Nasdaq grew about 29%.
- Lofty stock returns and muted bond growth may mean investors need to rebalance their allocations to bring them back to target.
- Otherwise, a portfolio may be riskier than intended.
Stocks soared in 2024.
Congratulations! After taking a victory lap, it may be time to adjust your portfolio — because those heady returns likely threw your investment allocations out of whack.
The S&P 500, a stock index of the largest public U.S. companies by market capitalization, gained 23% in 2024. Cumulative S&P 500 returns over the past two years (53%) were the best since 1997 and 1998.
Long-term investors generally have a target allocation of stocks to bonds — say, 60% stocks and 40% bonds. But lofty returns for stocks relative to muted ones for bonds may mean your portfolio holdings are out of that alignment, and riskier than you’d like. (U.S. bonds returned 1%, as measured by the Bloomberg U.S. Aggregate Bond Index.)
This makes it a good time for investors to rebalance their portfolios, financial advisors said.
Source: https://www.cnbc.com/2025/01/03/how-to-rebalance-your-portfolio-after-lofty-stock-returns-in-2024.html