In this episode of the Odd Lots podcast, the hosts delve into the market's response to the Federal Reserve's "hawkish cut," which involved lowering interest rates while indicating a slower trajectory for future reductions. They highlight the minimal market gains in 2024, largely dominated by a handful of major tech firms known as the "Magnificent Seven." This concentration poses challenges for portfolio managers who are striving for diversification. Looking ahead to 2025, the guests foresee a pivot toward mid-cap stocks and a shift to a more active investment strategy across various asset classes. They emphasize the importance of diversifying beyond just traditional stocks and bonds, particularly given the high correlation between bonds and equities.
