Time to read: 4 min

As we begin 2025, it’s helpful to reflect on the financial landscape of 2024. The year offered valuable insights into market dynamics and reinforced foundational investment principles. Based on a market review by Jordan Bradford, CFP® and Senior Financial Advisor at The Tranel Group, here’s a look at notable trends and considerations for investing moving forward.

The S&P 500: Tech Influence in the Spotlight

In 2024, the S&P 500—a key measure of the U.S. economy—experienced a 23% gain. This figure stands above the historical average of approximately 10% and was driven in part by the performance of larger companies.

The S&P 500 is weighted by market capitalization, meaning that larger companies have a more significant influence on its overall performance. As of early 2025, technology companies make up approximately 31% of the index. A significant portion of the 2024 performance was attributable to a group of prominent tech companies often referred to as the “Magnificent Seven”: Tesla, Nvidia, Meta (Facebook), Google (Alphabet), Amazon, Apple, and Microsoft.

This highlights an important consideration for investors: sector concentration can influence results in market-weighted indexes. While 2024 saw notable growth in technology, diversification across a broader range of industries can help balance the effects of sector-specific trends over time.

The NASDAQ: A Technology-Centric Index

For those monitoring the technology sector, the NASDAQ index provides insight into industry trends. In 2024, the NASDAQ grew by over 28%, outpacing the S&P 500. This result aligns with the tech-driven growth observed in the broader market.

However, past performance has demonstrated that technology can be subject to substantial volatility. This underscores the importance of maintaining a balanced approach when considering exposure to specific sectors within a portfolio.

The Dow Jones Industrial Average: A Broader View

Unlike the S&P 500 and NASDAQ, the Dow Jones Industrial Average (DJIA) reflects a more diverse mix of industries. In 2024, the DJIA achieved a 12% gain, offering a perspective on performance across a variety of sectors.

With technology accounting for only about 18% of its weight, the DJIA represents industries such as healthcare, financial services, and consumer goods. While its performance was more moderate compared to tech-heavy indexes, the broader composition provides insights into other areas of the economy.

Investment Takeaways: Diversification and Long-Term Focus

2024 serves as a reminder of the importance of diversification. While technology outperformed other sectors, gains in other industries also contributed to the year’s results. A diversified portfolio can help balance opportunities for growth with strategies designed to manage risk.

Discipline is another key principle. Reacting to short-term market movements by making frequent changes to portfolio allocations can lead to unnecessary volatility. A consistent, long-term approach allows investors to navigate market fluctuations while staying focused on their financial goals.

Putting 2024 in Context: Lessons from Market Cycles

To better understand 2024’s results, it’s helpful to consider recent market history. In 2022, major indexes faced significant declines, with the S&P 500 dropping over 20%, the NASDAQ falling by more than 33%, and the Dow Jones seeing a decline of approximately 10%.

This illustrates how markets can fluctuate significantly from year to year. Diversification and a long-term perspective help investors manage the effects of market cycles while staying aligned with their objectives.

Looking Forward: Planning for 2025 and Beyond

As we enter 2025, staying informed about evolving market trends remains essential. While technology played a significant role in 2024, other sectors may emerge as key contributors in the years ahead. A diversified portfolio promotes exposure to a range of industries, providing opportunities to participate in potential growth across different areas of the market.

Investment strategies should also reflect individual goals and risk tolerance. Whether pursuing growth or prioritizing a balanced portfolio designed for long-term sustainability, maintaining alignment with your objectives is critical.

Final Thoughts

The trends of 2024 highlighted the impact of sector performance on market results and reinforced core investment principles, such as diversification and disciplined investing. Staying focused on long-term goals, rather than reacting to short-term changes, can help investors navigate different market environments.

To learn more about market trends and portfolio strategies, watch Jordan Bradford’s full market review on our YouTube channel. Here’s to a thoughtful approach to investing in 2025!

This blog is for informational purposes. Certain information contained herein (including any forward-looking statements and economic and market information) has been obtained from published sources and/or prepared by third parties and in certain cases has not been updated through the date hereof. While such sources are believed to be reliable, The Tranel Group does not assume any responsibility for the accuracy or completeness of such information. The Tranel Group does not undertake any obligation to update the information contained herein as of any future date.