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Outlook

Economic Snapshot

Inflation Rate: 3.3%

12-Month CD Rate: 5.32%

As of 12/31/23. Data Sources: FactSet; Inflation–US Department of Labor via FactSet; CD rate is proxied by the highest 12-month CD rates available on Bankrate, 1/24.

Outlook

S&P 500 Index Earnings Are Near Record Highs

S&P 500 Index Earnings ($) and Price-to-Earnings (P/E) Ratio

As of 12/31/23. Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. Earnings per share is calculated as a company’s profit divided by the outstanding shares of its common stock. The resulting number serves as an indicator of a company’s profitability. P/E ratio is the ratio of the S&P 500 Index’s price divided by earnings per share. Please see representative index definitions below. Data Source: FactSet, 1/24.

Outlook

What’s Happened After a Good Year in the Market?

S&P 500 Index Calendar Year Returns (%)

Past performance does not guarantee future results. As of 12/31/23. Data Source: Morningstar and Hartford Funds, 1/24.

Outlook

Strong Fixed-Income Returns After Negative Years

Calendar Year Performance (%)

Past performance does not guarantee future results. Returns are for IA SBBI US Intermediate-Term Government Bond Index from 1926-1975 and the Bloomberg US Aggregate Bond Index from 1976-2023. Please see representative index definitions below. Data Source: Morningstar, 1/24.

Historical Perspective

Investors Need to Carefully Balance Income Potential With Risk and Diversification

Fixed Income vs. Equity Correlation Chart (2008–2023)

As of 12/31/23. Past performance does not guarantee future results. Asset classes are represented by: Cash: Bloomberg US Treasury Bill 1-3 Month Index; US Treasuries: Bloomberg US 7-10 Year Treasury Bond Index; MBS: Bloomberg US MBS Index; ABS: Bloomberg US Aggregate ABS Index; Global Government: Bloomberg Global Aggregate Bond Index; Municipals: Bloomberg Municipal Bond Index; Investment-Grade Corporate: Bloomberg US Corporate Bond Index; EM Debt: Bloomberg Emerging Markets Aggregate Bond Index; Bank Loans: Morningstar LSTA Leveraged Loan Index; High Yield Bond: Bloomberg Global High Yield Index. Yield is yield to maturity (i.e., the expected total return if a bond is held until maturity) for all indices except Municipals, which is Yield to Worst (i.e., the lowest possible yield on a bond without it defaulting). For illustrative purposes only. Please see representative index definitions below. Diversification does not ensure a profit or protect against a loss in a declining market. Data Sources: Bloomberg, S&P Dow Jones, and Morningstar, 1/24.

As of 12/31/23. Past performance does not guarantee future results. Based on the annual calendar-year returns of 50 highest-performing stocks of the MSCI ACWI Index. Please see representative index definitions below. For illustrative purposes only. Data Source: FactSet, 1/24.

As of 12/31/23. Past performance does not guarantee future results. Assumes reinvestment of capital gains and dividends and no taxes. Drawdown refers to the largest market drop from peak to trough during the calendar year. Data Sources: Morningstar and Hartford Funds, 1/24.

As of 12/31/23. Past performance does not guarantee future results. The chart shows the S&P 500 Index’s returns minus the MSCI World ex USA Index’s returns. When the line is above 0, domestic stocks outperformed international stocks. When the line is below 0, international stocks outperformed domestic stocks. The performance shown above is index performance and is not representative of any Hartford Fund’s performance. US equity is represented by the S&P 500 Index. International equity is represented by the MSCI World ex USA Index. For illustrative purposes only. Please see representative index definitions below. Data Sources: Morningstar, Bloomberg, and Hartford Funds, 1/24. 

As of 12/31/23. Past performance does not guarantee future results. The chart shows the values of the Russell 1000 Growth Index returns minus the Russell 1000 Value Index returns.When the line is above 0, growth stocks outperformed value stocks. When the line is below 0, value stocks outperformed growth stocks. The performance shown above is index performance and is not representative of any Hartford Fund’s performance. Growth stocks are represented by the Russell 1000 Growth Index. Value stocks are represented by the Russell 1000 Value Index. Please see representative index definitions below. For illustrative purposes only. Data Sources: Morningstar and Hartford Funds, 1/24.

Historical Perspective

Top 10 Stock Market Drops & Recoveries

10 Worst Single-Day Percentage Declines for US Stocks (1980–2023)

Past performance does not guarantee future results. Data shown is for the S&P 500 Price Index as of 12/31/23 and does not include the reinvestment of dividend payments. Please see representative index definitions below. Data Sources: Morningstar, Ned Davis Research, and Hartford Funds, 1/24.

Historical Perspective

Missing the Market’s Best Days Has Been Costly

S&P 500 Index Growth of $10,000 (1994–2023)

As of 12/31/23. Past performance does not guarantee future results. For illustrative purposes only. Data Sources: Ned Davis Research, Morningstar, and Hartford Funds, 1/24.

Historical Perspective

S&P 500 Index Bull Markets by the Numbers

Average gain: 114.9%

Longest bull: 1987–2000 (582% gain); second longest; 2009–2020 (400% gain)

The average gain during the first month of a new bull market: 13.6%

• During the first 3 months: 25.3%
• During the first 6 months: 27.4%

As of 12/31/23. Past performance does not guarantee future results. Data Source: Morningstar Direct, 1/24.

Historical Perspective

Bear Markets Are a Normal Part of Investing

S&P 500 Index Declines of 20% or More (1928–2023)

As of 12/31/23. Past performance does not guarantee future results. Data Source: Ned Davis Research, 1/24.

Historical Perspective

A Balanced Portfolio Can Help Balance Out Volatility

Cumulative Returns for Stocks, Bonds, and a Balanced Portfolio (2000–2023)

As of 12/31/23. Past performance does not guarantee future results. Stocks are represented by S&P 500 Index. Bonds are represented by the Bloomberg US Aggregate Bond Index. Balanced Portfolio is represented by 50% S&P 500 Index and 50% Bloomberg US Aggregate Bond Index. For illustrative purposes only. Data Sources: Morningstar and Hartford Funds, 1/24.

Investor Behavior

Buying and Selling at the Wrong Times Could Be Costly

30-year Annualized Returns by Asset Class (%) (1992–2022)

As of 12/31/22. Most recent data available. Performance data for indices represents a lump sum investment in 1/1/92–12/31/22 with no withdrawals. US Equities are represented by the S&P 500 Index. US Bonds are represented by the Bloomberg US Aggregate Bond Index. Index performance is not indicative of any Hartford fund’s performance.
Average Equity Fund Investor and Average Fixed Income Fund Investor performance results are calculated using data supplied by the Investment Company Institute. Investor returns are represented by the change in total mutual fund assets after excluding sales, redemptions, and exchanges. This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses, and any other costs. After calculating investor returns in dollar terms, two percentages are calculated for the period examined: Total investor return rate and annualized investor-return rate. Total investor-return rate is determined by calculating the investor-return dollars as a percentage of the net of the sales, redemptions, and exchanges for each period.
Dalbar’s Quantitative Analysis of Investor Behavior Methodology – Dalbar’s Quantitative Analysis of Investor Behavior uses data from the Investment Company Institute (ICI), Standard & Poor’s and Bloomberg Index Products to compare mutual-fund investor returns to an appropriate set of benchmarks. Covering the period from 1/1/1992–12/31/22, the study utilizes mutual-fund sales, redemptions and exchanges each month as the measure of investor behavior. These behaviors reflect the “average investor.” Based on this behavior, the analysis calculates the “average investor return” for various periods. These results are then compared to the returns of respective indices.

Investor Behavior

Buying Stocks After Big Market Drops Has Historically Been Profitable

S&P 500 Index Hypothetical Growth of $10,000 (1980–2023)

As of 12/31/23. Past performance does not guarantee future results. Assumes reinvestment of capital gains and dividends and no taxes. Data Sources: Thomson Reuters and Hartford Funds, 1/24.