Finance

The S&P 500 stock index gained 23% in 2024. The tech-heavy Nasdaq grew about 29%.
Lofty stock returns and muted bond growth may mean investors need to rebalance their allocations to bring them back to target.
Otherwise, a portfolio may be riskier than intended.

D3sign | Moment | Getty Images

Stocks soared in 2024.
Congratulations! After taking a victory lap, it may be time to adjust your portfolio — because those heady returns likely threw your investment allocations out of whack.

The S&P 500, a stock index of the largest public U.S. companies by market capitalization, gained 23% in 2024. Cumulative S&P 500 returns over the past two years (53%) were the best since 1997 and 1998.
Long-term investors generally have a target allocation of stocks to bonds — say, 60% stocks and 40% bonds. But lofty returns for stocks relative to muted ones for bonds may mean your portfolio holdings are out of that alignment, and riskier than you’d like. (U.S. bonds returned 1%, as measured by the Bloomberg U.S. Aggregate Bond Index.)
This makes it a good time for investors to rebalance their portfolios, financial advisors said.

Rebalancing brings a portfolio in line with investors’ long-term goals, ensuring they aren’t over or underweighted “inappropriately” in one particular asset class, said Ted Jenkin, a certified financial planner based in Atlanta and member of CNBC’s Financial Advisor Council.
“Every car should get an alignment check in the beginning of the year and this is nothing different with your investment portfolio,” said Jenkin, co-founder of oXYGen Financial.

How to rebalance your portfolio

Here’s a simple example of how portfolio rebalancing works, according to Lori Schock, director of the Securities and Exchange Commission Office of Investor Education and Advocacy.
Let’s say your initial portfolio has an 80/20 mix of stocks to bonds. After a year of market fluctuations, the allocation has changed to 85% stocks and 15% bonds. To return the mix to 80/20, you can consider selling 5% of your stocks and using the proceeds to buy more bonds, Schock said.
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“Set your targets for each investment — how much you’d need to grow your money to be satisfied, and how heavy each investment should be relative to the rest of your portfolio,” said Callie Cox, chief market strategist at Ritholtz Wealth Management.
“If the allocation gets too big or small, consider buying or selling to get your money back in balance,” she said. “Wall Street portfolio managers do this on a regular schedule. It’s a prudent investing exercise.”

A ‘huge gap in market fortunes’ in 2024

Rebalancing isn’t just about stocks versus bonds. Investors may also be holding other financial assets like cash.
A diversified portfolio also generally includes various categories within asset classes.
An investor’s stock bucket might have large-, mid- and small-cap stocks; value and growth stocks; U.S. and international stocks; and stocks within different sectors like technology, retail and construction, for example.

It’s important for investors to consider whether target weights to certain categories have also gotten out of whack, advisors said.
“There was a huge gap in market fortunes last year,” Cox said. “Tech stocks blew most other sectors out of the water, and the U.S. ran away from global markets.”
The so-called “Magnificent 7” megacap tech stocks — Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla — accounted for more than half of the S&P 500’s total gain in 2024. The Nasdaq, a tech-heavy stock index, swelled almost 29%.

Non-U.S. stocks “continued to underperform,” returning about 5% last year, according to experts in Vanguard’s Investment Advisory Research Center.
“Right now, I think it’s smart to review your tech investments and think about taking some profits,” Cox said. “Tech rules our lives, but it doesn’t always rule our portfolios.”

Don’t forget about taxes

Investors in 401(k) plans may have automatic rebalancing tools at their disposal, which can make the exercise simple if investors know their risk tolerance and investment time frames, Jenkin said.
Additionally, investors may have mutual funds or exchange-traded funds whereby professional money managers do the regular rebalancing for them, such as within target-date funds.
When rebalancing, it’s also important to consider tax implications, advisors said.
Investors with taxable accounts might trigger “unnecessary” short- or long-term capital gains taxes if they sell securities to rebalance, Jenkin said. Retirement investors with 401(k) plans and individual retirement accounts generally don’t need to consider such tax consequences, however, he said. More

A holding page for Keith Gill, a Reddit user credited with inspiring GameStop’s rally, before a YouTube livestream arranged on a laptop at the New York Stock Exchange on June 7, 2024.
Michael Nagle | Bloomberg | Getty Images

Crypto trades jumping. Roaring Kitty boosting meme stocks. Broader market ripping on no apparent catalysts.
Animal spirits are on the loose at the dawn of 2025 trading.

Many speculative pockets of the stock market surged Thursday, the first session of the new year, right after the S&P 500 closed out the best two-year run since 1998.
Stocks tied to the price of bitcoin jumped as the cryptocurrency climbed back over $96,000. Microstrategy added 3.6% after surging more than 360% in 2024. Crypto-related companies Coinbase, Robinhood, Mara Holdings and Riot Platforms also traded higher after a big 2024. A crypto token called “fartcoin” skyrocketed 45% and now has $1.38 billion market value.
Elsewhere, retail traders active on social media were busy playing a guessing game after online personality Roaring Kitty posted a cryptic gif on X featuring a “Chappelle’s Show” sketch in which comedian Dave Chappelle plays the late funk musician Rick James.
One of James’ songs is titled “Unity,” and some believe the meme stock leader, also known as Keith Gill, was referring to Unity Software, whose stock soared 9.1%. Others thought he was back touting his original favorite GameStop, whose shares also caught a bid.

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Meanwhile, semiconductor stocks — 2024’s big winners — helped lead the market again after the artificial intelligence trade lost some steam at the end of last year. Nvidia gained 3% Thursday.

What’s more, golf stock Topgolf Callaway Brands surged 14.5% on the back of an upgrade at Jefferies to buy from hold. The investment bank said shares of the golf equipment maker looked oversold and raised its price target to 65% above where the name closed the year.
With a pickup in market speculation, broad stock indexes were briefly higher to kick off 2025. The Dow Industrial Average advanced as much as 300 points before losing its momentum to close the day lower.
Thursday’s dramatic moves resembled the initial rallies on the back of Donald Trump’s election victory in November, as investors bet his pro-business policies would drive companies and the economy to strong growth. Those gains slowed toward the end of 2024 as concern grew that the president-elect’s protectionist policies could stir inflation or disrupt supply chains, and as the Federal Reserve signaled fewer interest rate cuts in 2025.
“Many investors assume that the incoming administration’s push for deregulation will unleash ‘animal spirits,'” Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, said in a recent note to clients. “But what if it only accelerates the concentration of monopoly power in the hands of a few, diluting the efficacy of broad economic measures and leaving behind even larger swaths of the populace?”
Correction: Online personality Roaring Kitty posted a gif on X featuring a “Chappelle’s Show” sketch in which comedian Dave Chappelle plays the late funk musician Rick James. An earlier version misstated the details of the post.

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Ken Griffin, founder and CEO of Citadel, speaks during The New York Times’ annual DealBook Summit in New York City, Dec. 4, 2024.
Michael M. Santiago | Getty Images

Billionaire investor Ken Griffin’s handful of hedge funds at Citadel all posted double-digit returns in 2024, led by its tactical trading strategy.
Citadel’s multistrategy Wellington fund, its largest, finished the year up 15.1%, according to a person familiar with the returns. All five strategies used in the flagship fund — commodities, equities, fixed income, credit and quantitative — were positive for the year, the person said.

The Miami-based firm’s tactical trading fund was the standout performer, with a 22.3% return for 2024, the person said. Citadel’s equity fund returned about 18%, while its global fixed income strategy gained 9.7%.
Citadel declined to comment. The hedge-fund giant had $66 billion in assets under management as of December.
The stock market just closed out a banner year with the S&P 500 surging 23.3%, building on a gain of 24.2% in 2023. The two-year gain of 53% is the best since the nearly 66% rally in 1997 and 1998.
Griffin recently criticized the steep tariffs President-elect Donald Trump has vowed to implement, saying crony capitalism could be a consequence.
The CEO also said he’s not focused on taking Citadel Securities public in the foreseeable future. The securities firm is a Miami-based market maker founded by the 56-year-old Florida native in 2002. More

A little over a decade ago Seth Klarman, a hedge-fund titan, worried that an asset-price bubble was emerging. He identified Tesla as one of the firms best exemplifying exuberance in the market. At the time, Elon Musk’s electric-vehicle company was worth around $30bn. Today its stockmarket value is $1.3trn. More

To get a full sense of the disruptive potential of Donald Trump’s economic agenda, look beyond the limelight hogged by Elon Musk to the wider cast of characters in the president-elect’s orbit. Russ Vought, a budget director, promises to “break the bureaucracy to the presidential will”. Peter Navarro, a trade adviser, muses about cancelling America’s trade deal with Canada and Mexico. Andrew Ferguson, an antitrust official, rails against big tech firms for suppressing dissident speech. More

For investors who bought on the rumour, it is nearly time to sell on the news. They have spent months gripped by uncertainty over what America’s next president will do in office, as rumours have flown thick and fast. How high will tariffs rise, and how strongly will other countries retaliate? Will he really keep campaign-trail promises of mass deportations, sweeping deregulation or trillion-dollar tax cuts? What will it all mean for growth, inflation and asset prices? With Donald Trump’s inauguration on January 20th, answers will at last start to arrive. More

Financial stability is top of mind for many Americans heading into 2025.
Five financial planners on CNBC’s Advisor Council discuss the financial resolutions households should target next year.

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Personal finances are top of mind for many households as they get set to ring in the new year.
About 38% of Americans ranked financial stability as their No. 1 focus area for 2025, according to a recent Allianz Life survey.

CNBC reached out to certified financial planners on its Financial Advisor Council to list their top resolutions for households as they look ahead to the coming year.
Here’s the financial advice they offered.
Kamila Elliott, Co-founder and CEO of Collective Wealth Partners

Kamila Elliott, CFP, is co-founder and CEO of Collective Wealth Partners in Atlanta.
Kamila Elliott

Create and stick to your budget! Max out on retirement contributions and create one personal financial goal such as paying off credit cards or investing an additional $100 a month in an investment account.
Barry Glassman, Founder and president of Glassman Wealth Services

Courtesy Barry Glassman

It starts and ends with knowing where the money is going. I encourage people to track their spending for a period of time, maybe going back to three months’ worth of credit card and Apple Pay payments. It’s incredible what behaviors will change once people just know the truth.
Marguerita Cheng, CEO of Blue Ocean Global Wealth

Courtesy Marguerita Cheng

I’m going to say estate planning. It’s important for everyone to address — even for an 18-year-old heading off to college in Fall 2025. I had my daughter complete a health care and financial power of attorney before I sent her off to college.

If people feel overwhelmed with the estate planning process, I remind people that it’s a process. Start with a financial and health care power of attorney.
You can then focus on beneficiary designations. Next, a will and trust, if the trust is appropriate for your situation. This process also helps individuals track down retirement plans from former employers. Estate planning is a wonderful opportunity to revisit life insurance as well.
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Lee Baker, founder, owner and president of Claris Financial Advisors

Courtesy Lee Baker

1. It’s not a popular subject but take the time review all your insurance coverages: 
Auto and home in particular have jumped significantly for many people. Don’t forget about disability and life insurance. As long as you can get up and earn a living, you can replace your car or rebuild your home. What happens if you can’t generate an income?

2. Spend some time reviewing your tax strategies and retirement planning: 

Required minimum distributions: Do you ‘need’ them? Would making Qualified Charitable Distributions improve your overall picture?
Tax loss harvesting: Here’s an opportunity to improve your overall portfolio performance.
Employee benefits: Are you fully taking advantage of a health savings account (if available) and retirement plan contributions?

3. Review your cash flow:
If you spent more than you should have over the holidays, now is a good time to make a plan to get rid of that financial hangover as well as making a plan to avoid it next year. Take a look at your personal interest rate environment. We have gotten a few rate cuts from the Federal Reserve so far. There may be more but either way take stock of your situation.
Cathy Curtis, founder and CEO of Curtis Financial Planning

Courtesy Cathy Curtis

1. Automate savings:
One of the best features of company retirement plans such as 401(k) plans and 403(b) plans is that the contribution amounts are automatically taken out of a person’s paycheck each month, and then the funds are automatically invested in a pre-selected selection of funds.
Since it’s important to save outside of retirement as well for other goals, setting up an automatic withdrawal from a checking account to a savings or investment account is a smart move. First step is to determine how much to save each money based on cash flow and then set up a monthly or quarterly transfer. Once it is set up, it is out of sight and out of mind and the savings will grow.

It starts and ends with knowing where the money is going … It’s incredible what behaviors will change once people just know the truth.

Barry Glassman
Founder and president of Glassman Wealth Services

2. Manage overspending:
In order to get a handle on overspending, the first step is to identify the spending weaknesses. It could be household furnishings, electronic equipment, clothing, travel, or jewelry, etc. Then, write down how much was spent in the problem category. A good way to find the numbers is to look at the year-end credit card statements. Then, write down a number that is 20-30% below the amount spent in 2024 and make that a new budget and target for 2025. Track spending each month on a spreadsheet or app to keep the spending goal top of mind.

3. Stay invested no matter the headline news:
If the end of 2024 is any indication, 2025 is likely to be a turbulent year in the stock market. With a new presidential administration coming in, global wars, inflation and uncertainty around the projection of interest rates, that is much to worry about. But decades of history show us that the market will go up over longer periods and the smartest move a long-term investor can make is to keep investing and stay invested. More

For decades, Art Cashin, UBS’ director of floor operations at the New York Stock Exchange, would write a New Year’s poem to reflect back on the year’s events. With Cashin’s passing earlier this month, his sons, Arthur and Peter, sent this homage to their father:
Some Other Cashins’ Comments:  An Homage PresentationDecember 30, 2024 

by Arthur Cashin III and Peter Cashin
In 2024,Wall Street stopped in fear.No more annual poemswithout Arthur here?
My brother and Isaid, “Let’s give this a try,”but with one precondition,there would be no AI!
Genetics or environment,we share his same vice.So, we joined our feeble minds,while marinating some ice. 
Paris hosted the Olympicsand chose to begin,by having the openingfloat down the Seine.

A container ship took outthe Francis Scott Key.The world wondered if Putindid same to Navalny.
The ruler of Syria,al-Assad is now gone,but in Ukraine and Gaza,the wars still carry on.
‘Round most of the world,incumbents lost reelection.Here in the U.S.,45’s now 47.
Wall Street continuedits historic bull run.And with the help of Wegovy,the world lost a ton.
Taylor Swift can go home.Eras came to an end.But only on the fielddid Travis’ knee bend.
Boeing’s labor strifepaused the 737.They also left two astronautsbetween here and heaven.
Some finance greats areno longer among us.We lost Jim Simons andHD’s Bernie Marcus.
We lost the deep bassHollywood counted upon.The voice of Mufasaand Vader is gone.
The choir of angelsgot a whole lot betternow that Cissy and Whitneyare singing together.
Arlo Guthrie’s old muse,she has a new haunt.Alice Brock is in heaven,at a new restaurant.
Toby Keith and Kristoffersonclimbed that heavenly stair.Now jammin’ with Buffett,must be 5 o’clock there.
Phil Donahue is up there,booking new guests.Wonder if Dr. Ruthwill be on his stage next.
A remake of “Tootsie”seems not to be far.Dabney Coleman was joinedby the great Teri Garr.
Whitey Herzog submittedhis final all-star roster.With Rose, Mays and Cepeda;not a single impostor.
Lou Carnesecca now coachesa team that’s the best,with players like Mutomboand Walton and West.
Zagallo and Beckenbauer,both Of World Cup fame,will rejoin greats like Pelefor a quick pick-up game.
Remember that sound biteyou’d hear without fail?We no longer have the voicewho said: “You’ve got mail!”
A poet laureate left us,as they eventually would.We can’t overlookthe great Charles Osgood.
And we would be remissnot to share why we’re sad.This exercise brought memoriesof our dear old dad.
To others, he was Arthur,Mr. Cashin or Chief.But he was our fatherand we share now our grief.
You knew him ashe wanted to be:Historian, philanthropist,soul of the NYSE.
If he joined you for drink,you should have been flatteredand talk markets or politics,or things that truly mattered.
From comments to speeches,writing was his art.But was he as funnyas the late Bob Newhart?
An Xavier alum,a true Jesuit scholar.Of his alma mater,there was no one prouder.Were it not for Ray Charlesor voters in Jersey,you never would have seen himon CNBC.
So as this year endsand you look to ’25,we offer two tipsto help you survive.
Cherish those still here.Remember those you miss.From the Cashins to yours,all the best is our wish.Begorrah, menorah,Lanza and Kwanzaa,May your New Year be filledwith true abbondanza!And as the ice meltedin each of our glasses,we knew if Dad read thishe’d kick both our asses. 
Rest in peace, Dad.
Art Cashin also traditionally led the annual singing of “Wait ’till the Sun Shines, Nellie” with current and former NYSE members on New Year’s Eve. On Tuesday, the sons will lead the singing at 1:45 p.m. ET and ring the bell to close out the year. More