Weekly Client Letter – October 28, 2024

In 2024 alone, the S&P 500 Index has notched nearly 50 record high days. This may lead to concerns or questions of how much higher the market has room to run or if it’s close to overheating.

However, the current price-to-earnings (P/E) ratio shows that stocks are trading at a 19% discount compared to earlier peaks. This means investors are paying less per dollar of earnings than before, presenting a more attractive valuation.

While this could be a sign that there is still room for the market to rise, it’s important to remember that market movements are always unpredictable. This is why we continue to monitor the markets closely and maintain diversification in portfolios.

Market Peaks, Priced Cheap

weekly client letter - october 28, 2024
Source: Bloomberg, Redwood. Data as of 10/24/2024. Date Range from 10/19/2018 – 10/24/2024.
  • We believe the preservation of capital is key to consistent, long-term investment success.
  • Our investment approach is grounded in economic theory and backed by quantitative analysis.
  • Managing drawdown risk is a pillar from which we build our portfolios.

60-Second Breakdown: October 28, 2024

Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.

Market Summary

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