The recommendation to diversify comes with the S&P 500 up 28% in 2024 after a 24% advance in 2023, which would make it only the fourth time in the last 100 years that the US equities benchmark has posted back-to-back annual gains of more than 20%. That’s left some of Wall Street questioning whether the torrid run can continue with sky high-valuations and the threat that US President-elect Donald Trump’s proposed tariffs and tax policies could reignite inflation and spur volatility.
US stocks can keep climbing next year even after posting banner returns in 2023 and 2024, with gains fueled by economic and corporate profit growth, according to Citigroup’s wealth division. But investors probably should look for opportunities beyond the usual suspects.
“S&P 500 Index returns sound wonderful, but it’s backward looking,” Steven Wieting, Citi Wealth chief investment strategist and economist, said in an interview. “We have to expand portfolio horizons and expect some of the other assets that are really out of favor right now to be driving incremental returns going forward.”
