December 2024: An outstanding year for the markets
In December, the markets dipped into the red. Nonetheless, 2024 was on the whole a fantastic year for investors.
- An outstanding year for investors
- American economy keeps growing
- Looking ahead to 2025
An outstanding year for the markets
2024 was a remarkable year for the markets, with the ready-made Peaks portfolios delivering impressive returns: from +6.3% for Cautious to an outstanding +16% for Adventurous.
The average return of Peaks portfolios since the launch of Peaks now stands at +2.6% per year for Cautious to +9.3% per year for Adventurous.
These aren't just great returns; they also highlight why investing is a good way to build wealth over the long term.
The higher your return becomes over time, the stronger the compounding effect gets – and the faster your wealth grows in value.
Table 1: Net returns of Peaks portfolios
| Peaks portfolio | December | 2024 | Average annual since Peaks launch | Total since Peaks launch |
|---|---|---|---|---|
| Cautious | -1.7% | 6.3% | 2.6% | 21.7% |
| Balanced | -1.8% | 9.5% | 4.8% | 42.4% |
| Ambitious | -1.9% | 12.7% | 7.1% | 66.1% |
| Adventurous | -2.0% | 16.0% | 9.3% | 92.2% |
Important to know:
These net returns reflect Peaks portfolios in December 2024, all of 2024, and since the launch of Peaks, after deducting Peaks, fund, and transaction fees. The value of investments can fluctuate, and past performance is no guarantee of future results.
The above figures assume a portfolio value of €10,000 without any deposits or withdrawals. If you made deposits or withdrawals this month, your personal return may differ. Your return will also vary if you have invested less or more than €10,000 due to the monthly fees Peaks charges.
Table 2: Risk of Peaks portfolios
| Risk (volatility) | December | 2024 | Average annual since Peaks launch |
|---|---|---|---|
| Cautious | 3.8% | 4.6% | 5.6% |
| Balanced | 4.8% | 6.0% | 7.4% |
| Ambitious | 5.8% | 7.6% | 9.7% |
| Adventurous | 6.9% | 9.3% | 12.1% |
Important to know:
This table shows the risk levels of the four Peaks portfolios over different time periods (last month, this year, and the average since Peaks launched). Risk, also known as volatility, reflects the variation in annualised returns and is measured using the standard deviation of daily net returns converted to an annual basis.
The American economy keeps growing
In December 2024, stock prices declined. The main reason? While announcing a new interest rate cut, the U.S. Federal Reserve (FED) indicated that it might reduce rates less in 2025 than expected, should inflation not fall further. Investors reacted negatively to this news. While the rate cut itself had been anticipated, the revised outlook was disappointing. As a result, the key U.S. S&P 500 index closed nearly 3% lower, and the tech-heavy Nasdaq fell by 3.5%.
Still, the U.S. economy performed reasonably well in December. Job growth far exceeded expectations, and data showed that the economy grew by just over 3% in the third quarter of 2024. Additionally, producer confidence in both manufacturing and services sectors increased, likely reflecting optimism about Donald Trump’s upcoming presidency, which promises strong support for U.S. businesses.
Europe, by contrast, lags behind. While inflation has decreased (prices rose less sharply than in the U.S.), economic growth remains slower (0.4% in Q3). At the moment, the European economy is less robust than its U.S. counterpart.
Table 3: Net returns of index funds in standard Peaks portfolios
| Stocks | ISIN | December | 2024 | Total return since Peaks launch |
|---|---|---|---|---|
| North America | LU0629460089 | -2.3% | 26.7% | 175.4% |
| Europe | IE00B52VJ196 | -1.8% | 5.6% | 66.4% |
| Asia-Pacific | LU0629460832 | -2.1% | 9.5% | 36.4% |
| Emerging markets | IE00BYVJRP78 | -0.9% | 12.0% | 24.4% |
| Bonds | ||||
| European gov. bonds | IE00B4WXJJ64 | 0.6% | 1.5% | -4.5% |
| European corp. bonds | LU0484968812 | 0.9% | 4.0% | 2.0% |
Important to know:
These net returns reflect the performance of index funds in December 2024, all of 2024, and since Peaks launched, after deducting Peaks, fund, and transaction fees. The value of investments can fluctuate, and past performance is no guarantee of future results.
Looking ahead to 2025
What will 2025 bring? Nobody knows. That’s why we stick to our vision: diversify your investments and invest passively. Historically, this has been the best way to build wealth over the long term. It tends to deliver higher average returns compared to active investing, as it incurs lower costs and involves less risk.
Of course, there’s significant global uncertainty, with various conflicts and a new president at the helm of the world’s largest economy (the U.S.). What if stock prices fall?
The best thing to do remains the same: don’t panic and diversify your investments so they can withstand market fluctuations. Avoid being swayed by uncertainty, focus on the long term, stay consistent, and stick to your goals. Historically, this has proven to be the best investment strategy. No matter what happens, the global economy has shown it can always recover from every crisis.
Rosanne
Copywriter, Peaks
Explore more
Peaks named ‘Best-Rated Investment Platform’ for second year running
Time to celebrate: Peaks has won another Golden Bull award! For the second year in a row, we’ve been named the ‘Best-Rated Investment Platform’ in the Netherlands.