BJK Financial Group Blog

As we step into 2025, it's a good time to pause and reflect on the major events of 2024 and how they shaped the world of investing. Whether you’re a seasoned investor or someone new to the market, understanding these developments can help us make informed decisions moving forward.

2024 was a year filled with both challenges and opportunities, from political shifts to significant economic events. In this blog, I’ll recap the key moments of the year and share analysts' projections for 2025, providing you with a clear and relatable perspective on what lies ahead.

Major Events in 2024

1. Global Economic Conditions

2024 started on a cautious note as central banks worldwide continued their efforts to tame inflation. While the U.S. Federal Reserve and the Bank of Canada paused rate hikes early in the year, the effects of previous increases were still rippling through economies.

In the U.S., GDP growth slowed to 2.1%, reflecting tighter monetary policies and weaker consumer spending. Similarly, Canada’s economy faced challenges, with growth hovering around 1.5%. The energy sector, however, provided some relief, as oil prices stabilized at an average of $85 per barrel after volatility in 2023.

In Europe, the energy crisis caused by the ongoing conflict in Ukraine eased slightly as countries diversified their energy sources. However, the region’s growth remained sluggish, at 0.9%, with Germany narrowly avoiding a recession (source).

2. Geopolitical Shifts

The war in Ukraine entered its third year, continuing to impact global energy markets and trade routes. Despite diplomatic efforts, a resolution remained elusive, keeping commodity markets on edge.

In the Middle East, tensions between Israel and its neighboring countries escalated briefly in mid-2024, sending oil prices higher for a short period. Meanwhile, China’s slower-than-expected recovery from COVID-related lockdowns led to reduced demand for global commodities, adding to the uncertainty in the markets.

3. Market Performance

The stock markets had a mixed year. In the U.S., the S&P 500 ended 2024 up by 9%, driven by a late-year rally in technology and healthcare stocks. Canada’s TSX Composite Index performed modestly, gaining 6%, supported by strong performances in energy and materials sectors.

Cryptocurrencies made headlines again, with Bitcoin climbing 40% as institutional investors showed renewed interest. However, volatility remained a key characteristic of the crypto market, making it a challenging space for retail investors.

4. Political Landscape

In the U.S., the 2024 presidential election dominated headlines. President-Elect Donald Trump secured a narrow victory, which brought some stability to markets, reacting favorably to his potential tax cuts.  Debates over debt ceilings, fiscal policies and immigration continued to create uncertainty. (source).

Canada held no federal election in 2024, but provincial politics, particularly in Alberta and Ontario, shaped local economies. Alberta saw a surge in investment in renewable energy projects, while Ontario’s housing affordability crisis persisted, sparking policy debates (source).

5. Natural Disasters and Climate Initiatives

Severe weather events, including wildfires in Canada’s west and hurricanes in the U.S., reminded the world of the urgent need for climate action. These events also impacted insurance and utility companies, with analysts predicting a shift in investment strategies toward renewable energy and climate-resilient infrastructure (source).

Projections for 2025

1. Economic Outlook

Economists predict that 2025 will be a year of moderate recovery as inflationary pressures ease. In Canada, GDP growth is expected to rebound to 2.3%, while the U.S. is projected to grow at 2.6%. The global economy, driven by improving conditions in emerging markets, could see growth of 3.5% (source).

Central banks are likely to maintain their current interest rate levels, with potential rate cuts in the latter half of the year if inflation continues to decline. This stable monetary environment should support businesses and consumer spending.

2. Stock Market Predictions

Analysts are cautiously optimistic about stock markets in 2025. Technology, healthcare, and renewable energy sectors are expected to lead gains. Companies investing in artificial intelligence (AI) and clean energy solutions are likely to be at the forefront of growth (source).

In Canada, the TSX Composite Index is projected to grow by 7-9%, driven by continued strength in natural resources and an expected rebound in the financial sector. Meanwhile, the U.S. S&P 500 could see gains of 8-10%, assuming no major geopolitical shocks.

3. Key Risks to Watch

While the outlook is positive, several risks remain:

• Geopolitical Tensions: Ongoing conflicts in Ukraine and the Middle East could disrupt energy markets and trade (source).
• Climate Change: Extreme weather events may continue to strain economies and industries (source).
• China’s Economy: A slower recovery in China could affect global demand for goods and commodities (source).
• Debt Levels: High public and private debt levels in many countries remain a potential drag on growth (source).

4. Investment Opportunities

For investors, 2025 offers several areas of opportunity:

• Green Energy: Investments in renewable energy and sustainability-focused companies are expected to grow (source).
• AI and Technology: Companies leveraging AI and automation to improve efficiency could see significant gains (source).
• Dividend Stocks: With interest rates stabilizing, dividend-paying stocks may become attractive for income-focused investors.
• Emerging Markets: Economies in Asia, Latin America, and Africa could deliver strong returns as they recover from pandemic-related setbacks (source).

5. Tips for Investors

As always, it’s important to stay diversified. Don’t put all your eggs in one basket—spread your investments across sectors and geographies. Consider your risk tolerance and time horizon before making any major investment decisions. If you’re unsure where to start, working with a financial advisor can help you build a portfolio tailored to your goals.

Closing Thoughts

2024 was a year that tested the resilience of economies and investors alike. From inflation and geopolitical tensions to promising advances in technology and sustainability, it reminded us of the importance of staying informed and adaptable.

Looking ahead, 2025 offers a mix of opportunities and risks. By staying focused on long-term goals and being mindful of market dynamics, we can navigate the path ahead with confidence.

If you have questions about your investment strategy or want to explore new opportunities, feel free to reach out. Together, we can make 2025 a successful year for your financial journey.

Sources:

• U.S. Federal Reserve Economic Data (2024 GDP and inflation reports)
• Bank of Canada Monetary Policy Reports (2024 trends and 2025 projections)
• World Bank Global Economic Prospects (Emerging market outlook for 2025)
• Bloomberg Markets (2024 stock market performance and 2025 forecasts)
• Reuters (Ukraine conflict and energy market updates)
• Climate Action Tracker (2024 climate initiatives and impact on industries)