LETTER FROM FACULTY ADVISOR
The Herbert B. Mayo Student Investment Fund provides undergraduate students an opportunity to develop and increase their knowledge of investments through the hands-on experience of selecting and managing the Fund’s assets. The Fund was initially created by a gift from a faculty member, Dr. Herbert B. Mayo, and contributions from alumni. Since its inception in 2000, well over three hundred undergraduate students have participated in determining the portfolio’s allocation and selecting individual securities to buy and/or sell. This process has improved the participants’ analytical and presentation skills in portfolio decision-making. The primary goal of the Fund is the growth in the value of the assets, however, the SIF distributes 3 to 4 percent of the value of the Fund as a one-time scholarship/gift to incoming students from Ewing as a giveback to the community. The Fund values the significance of its social impact initiatives. If you want to invest in a finance major’s future, I invite you to contribute to the SIF. To make a contribution, please visit give.tcnj.edu and indicate that your contribution is to be directed to the School of Business Student Investment Fund.
Navigating 2024: Inflation and Interest Rate Dynamics
From March 2022 to June 2023, the Federal Reserve implemented a significant monetary policy tightening cycle, increasing the fed funds rate by 525 basis points. This robust policy was aimed at bringing inflation back to the Federal Reserve’s 2% target.. In November 2023, the Federal Reserve set the stage for market expectations of potential rate cuts in 2024. In 2024, the Federal Reserve’s rate cut expectations had a substantial impact on the equity market, particularly noticeable in the first quarter with a 10% advance. However, inflation proved to be more persistent than anticipated, prompting many to speculate about the timing and frequency of the Federal Reserve’s interest rate cuts. Despite the 2023 gains driven by mega-cap stocks, the market was looking forward to a more diversified advance in 2024, with expectations of growth in U.S. small-cap, international stocks, and AI-themed names.However, several risk factors could potentially influence the stock market in 2024. The market is perceived as overvalued, and large technology stocks are under pressure to demonstrate their growth potential. Key market benchmarks could cause confusion, and consumer unease is on the rise. Inflation continues to be a concern, and government spending is rising. Additionally, persistent inflation may reduce the likelihood of the Federal Reserve lowering interest rates in the near future. These combined factors could introduce additional uncertainty into the equity market. Furthermore, 2024 is a year marked by numerous elections worldwide, contributing to geopolitical complexity in the global elections supercycle. The geopolitical risks we face today have the potential to drive fundamental changes in global markets. These economic, financial, and other risks must be taken into account in investment strategies and risk management, as they can significantly influence market trends. Consequently, our fund members are encouraged to focus on the fundamentals of portfolio management and conduct a thorough analysis of risk factors impacting the firms which they plan to invest. Slowing inflation, positive GDP growth, and low unemployment should provide in general a constructive economic environment in 2024.
Seung Hee Choi
SIF Faculty Advisor & Professor of Finance
choi@tcnj.edu
Herbert B. Mayo Student Investment Fund | LinkedIn