Hi Friends,
Ready for the new year? Well, before that happens, we need to reflect and learn now that we have finished 2024 and are we are rocketing right into 2025. Today, I want to summarize 2024’s economy how the economy and our finances changed in 2024, and how that will affect the economy in 2025. I will discuss the changes in the S&P 500, interest rates, and crypto.
Last year, the S&P 500 closed at a record high 57 times! There were so many record highs; this graph is from a NY Times Article will help you see how much this happened compared to past years.
These growth numbers have been absurd. I do not think these growth numbers will continue at this rapid rate. But, I do think the S&P 500 is a very stable ETF, and when I used to invest, I invested in the S&P 500 and it has been performing quite well. In 2024, The S&P 500’s value increased by 23.3%. That is such a huge gain. Along with in 2023, There was a gain of 24.2%. This 52% 2-year gain is phenomenal and has been the best 2 years since 1997-1998 with a 66% gain over both years combined. The S&P 500 has been doing so well that the average annual return is close to 10%. Since the housing crisis of 2008, the S&P 500 has gone up in value by 505.27%, which beats inflation by close to 315%. Even with inflation on the rise recently, the S&P 500 still yet beats it out most years, especially with 57 record-high days last year.
Interest Rates
Interest rates have been all over the place since last year. At the end of 2023, they skyrocketed. At the end of 2023, I got a 12-month certificate of deposit for 5.3%. This was a very good CD rate. As we entered 2024, the fast-growing interest rate growth slowed down. Although this is a bit of a toss-up for most people. This is because high interest rates are good for savings accounts as the higher the interest rate, the more money you will get in interest dividends on your saved cash. But, for people who have mortgages or are considering a mortgage; It doesn’t bode well with them because they pay more in interest on their loans.
Nonetheless, interest rates were relatively stable for most of the year. But, as the year came to a close interest rates started falling. At the end of 2023, I opened a Capital One 360 Performance Savings account and the interest rate was an incredibly high 4.5% APY. I have since closed that account, but I have been monitoring it and it is still at 3.8%. Interest rates haven’t dropped too much this year, but they have gone down a little bit.
Bitcoin (BTC)
Bitcoin has risen so much since Trump was elected and below is a graph related to the price of bitcoin from the NY Times.
Earlier this month the price of Bitcoin rose to just over $100,000 in value for the very first time in Bitcoin history. This is especially astonishing after the fact that in 2022; Bitcoin dropped to less than $17,000 in value. For Bitcoin to come back from that just about 2 years ago is crazy to me. It hit an all-time high of $108,000 in December 2024.
Trump was elected this November and will be inaugurated this January. Trump constantly says that he is pro-crypto and has made promises for Bitcoin and other cryptocurrencies. This means that Bitcoin has the potential to go above $108k and a lot above that with a lot of new possible crypto policies in the next 4 years.
Anyway, thank you so much for reading this edition of Friday Finance. Additionally, thank you so much to all of my subscribers and I look forward to making my next article for you guys. If you have any questions, please email [email protected]. I also have a WhatsApp community for Friday Finance including Feedback, Ideas, and general chats about finance and business. If you would like to join, click the button below.
Thanks,
Jacob Gans
Friday Finance